State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Smt. Sita Rani on 8 October, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR-37A, CHANDIGARH
2nd Bench
FIRST APPEAL NO. 1478 OF 2008
Date of Institution: 22.12.2008
Date of Decision: 8.10.2012
Life Insurance Corporation of India having its office at 35, The Mall
Amritsar through authorized officer, Smt. P. Kwatra, Manager (Legal &
HPF), Life Insurance Corporation of India, Divisional Office, 'Jeevan
Parkash', Sector 17-B, Chandigarh.
.....Appellant
VERSUS
Smt. Sita Rani widow of Late Shri Ram Lubhaya son of Sh. Rattan Chand
r/o Ward No. 5, Near Gurudwara Loharnwala Fatehgarh Churian, District
Gurdaspur.
.....Respondent
First Appeal under Section 15 of the
Consumer Protection Act, 1986
against the order dated 3.11.2008
passed by the District Consumer
Disputes Redressal Forum, Amritsar.
Before:
Sh. Inderjit Kaushik, Presiding Member
Sh. B.S. Sekhon, Member Present:
For the appellant : Sh. Rajesh K. Sharma, Advocate
For the respondent : Sh. Anil Chawla, Advocate
BALDEV SINGH SEKHON, MEMBER
This is an appeal against the order dated 3.11.2008 passed by the District Consumer Disputes Redressal Forum, Amritsar (hereinafter called as "District Forum") vide which the complaint of the complainant/respondent (hereinafter called as "respondent") was allowed.
2. Briefly stated, the facts of the case are that Sh. Ram Lubhaya s/o Rattan Chand, husband of the respondent obtained a life insurance policy bearing No. 471330124 from the appellant for a sum assured of Rs. First Appeal No. 1478 of 2008 Page 2 of 9 1,00,000/-, which was effective from 8.9.2003 and the premium of Rs. 2,806/- was quarterly payable. Maturity date of this policy was 8.9.2013.
3. It was pleaded that the husband of the respondent regularly paid the premium of the policy till it was lapsed due to non-payment of the premium and the same was revived by making payment of Rs. 11,716/- against receipt dated 16.2.2007. It was further pleaded that at the time of procuring the policy as well as at the time of reviving of the policy, the husband of the respondent was keeping good health and was not suffering from any disease. His medical examination was conducted by the doctors of the appellant before issuing the policy and at the time of its revival also he was found perfectly fit. The husband of the respondent suddenly suffered from jaundice and got treatment from New Mahajan Hospital, Fatehgarh Churian as well as Guru Nanak Dev Hospital, Amritsar and he died on 14.8.2007. The respondent, being the wife as well as the nominee of the life assured, made representation to the appellant to pay her the sum assured alongwith other benefits but the appellant repudiated the claim of the respondent vide its letter dated 27.2.2008 on the ground that at the time of revival of the policy, the husband of the respondent was not keeping good health and was suffering from 'Alcoholic liver disease, Cirrhosis with Portal Hypertension with G.I. Hepatic Encephalopathy'. It was pleaded that the repudiation of the claim of the respondent was illegal and the husband of the respondent was not suffering from any disease at the time of revival of the policy and he died as a result of jaundice suffered by him and he was not suffering from any disease mentioned in the repudiation letter. Even after the receipt of repudiation letter, the respondent visited the appellant and requested them to pay a sum assured alongwith other benefits arising out of aforesaid First Appeal No. 1478 of 2008 Page 3 of 9 insurance policy but the appellant flatly refused to exceed to the genuine claim of the respondent.
4. Hence the complaint before the District Forum seeking directions to the appellant to pay Rs. 1,00,000/- with all benefits arising there from alongwith interest @ 18% per annum from the date of death of the husband of the respondent till its payment. A compensation of Rs. 50,000/- was also prayed.
5. Upon notice, the appellant filed a written statement in which it was pleaded that the deceased Ram Lubhaya willfully and fraudulently concealed the material facts regarding his health condition at the time of revival of the policy on 16.2.2007 and gave wrong answers to the questions of the proposal for assurance signed by him knowing well that these were incorrect and he stated that he was in good health. The deceased life assured (hereinafter called as "DLA") died on 14.8.2007 i.e. within six months from the date of revival of the policy. It was further pleaded that on submission of the claim form by the respondent, the matter was got investigated and it was found that the DLA was a chronic alcoholic and died due to cirrhosis of liver. The DLA had also taken treatment from New Mahajan Hospital, Fatehgarh Churian from 1.4.2006 to 3.5.2006 as an OPD patient for acute PIVD (disc problem) and this fact was not mentioned by the insured while getting the policy revived. The insured had also availed the leave from 1.4.2006 to 3.5.2006. Above all the DLA was a chronic alcoholic which also stood proved from the discharge card of the Guru Nanak Dev Hospital, Amritsar where the DLA remained admitted from 17.7.2007 to 19.7.2007 in which, it is mentioned that the insured was a chronic alcoholic for the last 30-35 years and was diagnosed as a case of First Appeal No. 1478 of 2008 Page 4 of 9 'Alcoholic liver disease, Cirrhosis with Portal Hypertension with G.I. Hepatic Encephalopathy'. The fact about this alcoholic habits and consequent ill health was known to the DLA and this fact was not disclosed at the time of taking the policy and its revival on 16.2.2007. The claim of the respondent was repudiated by the competent authority and declared the policy as void ab initio on 27.2.2008 on the basis of suppression of facts of material for insurance. The DLA tried to play fraud with the appellant to grab public money for his legal heirs.
6. It was further pleaded that as per condition and privileges of the policy contract printed on the back of the policy bond in para No. 5 under the heading of the Forfeiture in certain events which reads as under:-
"In case the premium shall not be duly paid or in case of any condition hereinafter contained or endorsed here shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal personal statement declaration and connected documents or any material information is withheld then in every such case but subject to the provisions contained in section 45 of the Insurance Act, 1938 wherever applicable this policy shall be void and all the claims to any benefits in virtue hereof shall cease and determine and all money that have been paid in consequence thereof shall belong to the Corporation excepting always lawfully granted by the Corporation."
7. Dismissal of the complaint was prayed.
8. The parties led their evidence by way of affidavits and documents.
9. The learned District Forum, after going through the pleadings of the parties and evidence on record, allowed the complaint of the respondent First Appeal No. 1478 of 2008 Page 5 of 9 and the appellant was directed to pay the sum assured of Rs. 1,00,000/- to the respondent alongwith interest @ 9% per annum from the date of repudiation of the claim till the payment of the amount. Litigation expenses of Rs. 1,000/- were also awarded.
10. Aggrieved by this order, the appellant has come up in appeal.
11. The learned counsel for the appellant submitted that the DLA had been suffering from 'Alcoholic liver disease, Cirrhosis with Portal Hypertension with G.I. Hepatic Encephalopathy' at the time of taking the policy but he intentionally concealed this fact regarding his health. It was further submitted that the DLA gave wrong answers to the questions in the personal statement regarding health as under:-
"2. Since the date of your proposal for the above mentioned policy:
(a) Have you ever suffered from any illness/disease No requiring treatment for a week or more?
(b) Did you have any operation, accident or injury? No
(c) Did you ever undergo ECG, X-Ray, Screening, No
Blood, Urine or Stool Examination?
4. Are you at present in sound health? Yes"
12. Above answers were wrong and DLA deliberately and fraudulently gave false information. Had he given the correct answers to the above questions, revival of the policy would not have been effected.
13. It was further stated by the counsel for the appellant that on the basis of the investigation report, the claim of the respondent was repudiated by letter dated 27.2.2008 for concealing the material facts and supplying the wrong information. Hence it was prayed that the appeal be accepted and the impugned order of the District Forum be set aside.First Appeal No. 1478 of 2008 Page 6 of 9
14. The learned counsel for the respondent submitted that there was no merit in the appeal and the same be dismissed with costs.
15. The learned counsel for the appellant as well as the respondent submitted written submissions as well.
16. Submissions have been considered. Record has been perused.
17. The admitted facts of the case are that Ram Lubhaya s/o Rattan Chand, husband of the respondent, obtained a life insurance policy from the appellant for a sum assured of Rs. 1,00,000/- on 8.9.2003. The respondent was appointed as nominee. This policy had lapsed due to non-payment of the premium and the same was revived on 16.2.2007 after the payment of Rs. 11,716/- by the respondent. The DLA expired on 14.8.2007. The respondent filed the death claim which was repudiated by the appellant vide its letter dated 27.2.2008 (Ex. R-2) on the ground that the DLA was not keeping good health at the time of revival of the policy. The DLA was a chronic alcoholic for the last 30-35 years and was suffering from 'Alcoholic liver disease, Cirrhosis with Portal Hypertension with G.I. Hepatic Encephalopathy' as per the certificate from Guru Nanak Dev Hospital, Amritsar. He also received a months' long treatment from New Mahajan Hospital in the month of April, 2006, for acute PIVD. It was, therefore, stated that the DLA withheld the material information regarding his health at the time of getting the policy revived. As per terms of declaration signed by him at the foot of the personal statement, the revival of the policy was declared null and void.
18. The respondent has contended that the DLA was not suffering from any disease at the time of revival of the policy and he died due to jaundice on 14.8.2007. The appellant has proved on record the claim enquiry report First Appeal No. 1478 of 2008 Page 7 of 9 (Ex. R-3) in which the enquiry officer, Sh. Ashok Sharma, Branch Manager, SSO, Fatehgarh Churian has found that the DLA was a chronic alcoholic for 30-35 years. He was not in a good health while taking the policy as well as at the time of revival of the policy. The enquiry officer relied upon the certificate issued by New Mahajan Hospital dated 3.5.2006 (Ex. R-4) in which it has been mentioned that the DLA had remained under treatment as OPD patient with diagnosis of acute PIVD from 1st April, 2006 to 3rd May, 2006 and he was advised complete rest. Similarly, he has relied upon the discharge-cum-follow up card (Ex. R-5) issued by Dr. Santokh Singh of the Department of Medicine Unit 1 of the Government Medical College/GND Hospital, Amritsar. Perusal of this document shows that the DLA was admitted on 17.7.2007 and was discharged on 19.7.2007. In this document diagnosis of the DLA has been mentioned as 'Alcoholic liver disease, Cirrhosis with Portal Hypertension with G.I. Hepatic Encephalopathy'. In the history it has been mentioned that the patient is a chronic alcoholic since 30-35 years yet it has not been mentioned anywhere in the discharge-cum-follow up card since when the DLA was suffering from the disease diagnosed on 17.7.2007. Even though the report says the DLA was a chronic alcoholic since 30-35 years yet it does not suggest that the patient was actually suffering from a material disease for the last 30-35 years. Even though taking alcohol may not be good for health but it cannot be assumed that the taking of liquor in itself is a disease. No doubt, intake of alcohol in a large quantity may lead to some problem but the fact that the DLA survived for 35 long years inspite of his habit of being alcoholic shows that he was not suffering from any serious disease during this long span of period. In the absence of any specific observation by the doctor First Appeal No. 1478 of 2008 Page 8 of 9 that the disease, which was diagnosed on 17.7.2007 was existing earlier, it cannot be presumed that he was actually suffering from the same disease at the time of revival of the policy on 16.2.2007 i.e. five months prior to the date of admission in the GND Hospital, Amritsar. The appellant has not placed on record any document to show that the DLA was actually suffering from the said disease any time prior to the date of revival. The certificate given by New Mahajan Hospital dated 3.5.2006 stating that the DLA was suffering from PIVD (disc problem) from 1st April, 2006 to 3rd May, 2006, does not support the version of the appellant because the treatment given in the New Mahajan Hospital pertained to altogether different disease and had no bearing on the disease diagnosed on 17.7.2007 nor the same can be attributed to the alcoholic habits of DLA. The DLA remained on leave for almost the same period. This absence from the duty has also no effect on the disease which was diagnosed subsequent to the revival of the policy. Since the appellant has failed to prove that the DLA was actually suffering from any material disease, therefore, the question of concealment of the fact about his health does not arise. Therefore, it cannot be said that the revival of the policy on dated 16.2.2007 was null and void.
19. In view of the above discussion and findings, we find no merit in the appeal of the appellant and no reason to interfere with the impugned order of the learned District Forum. Accordingly, the appeal of the appellant is dismissed and the impugned order of the learned District Forum is affirmed.
20. The appellant has deposited an amount of Rs. 25,000/- with this Commission at the time of filing of the appeal on 22.12.2008. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the First Appeal No. 1478 of 2008 Page 9 of 9 registry to the respondent/complainant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant.
21. The interest on the amount of Rs. 25,000/- shall stop running with effect from the date the appellant had deposited the same in this Commission. Interest on this amount of Rs. 25,000/- shall be what has accrued on this amount when it remained deposited by this Commission in the Bank.
22. Remaining amount shall be paid by the appellant to the respondent as ordered by the learned District Forum.
23. The arguments were heard on 1.10.2012 and the order was reserved.
Now, the order be communicated to the parties.
(Inderjit Kaushik) Presiding Member (Baldev Singh Sekhon) Member October 8, 2012 VINAY