National Consumer Disputes Redressal
Gurmeet Kaur @ Meeto & Anr. vs Lic Of India on 25 March, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1555 OF 2011 (Against the Order dated 13/01/2011 in Appeal No. 1017/2007 of the State Commission Haryana) 1. GURMEET KAUR @ MEETO & ANR. R/o. Village Mugalwali, Tehsil Jagadhri Yamuna Nagar Haryana 2. SH. KATAM CHAND, S/O. SH. R/o. Village Mugalwali, Tehsil Jagadhri Yamuna Nagar Haryana ...........Petitioner(s) Versus 1. LIC OF INDIA Through its Branch Manager, Jagadhri Yamuna Nagar Haryana ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER HON'BLE MRS. REKHA GUPTA, MEMBER For the Petitioner : Mr A S Dateer, Advocate For the Respondent : Mr Rajneesh Malhotra, Advocate Dated : 25 Mar 2015 ORDER REKHA GUPTA Revision petition no. 1555 of 2011 has been filed against the order dated 13.01.2011 of the Haryana State Consume Disputes Redressal Commission, Panchkula ('the State Commission') in appeal no. 1017 of 2007.
2. The facts of the case as per the petitioner/ complainant are that the husband of the petitioner had purchased three policies no. 172026654 for Rs.25,000/- and no. 172371571 for Rs. 3.00 lakh on 30.12.2000 and no. 170241394 for Rs.25,000/-. On 07.01.2003 the husband of the petitioner died, upon which a claim was lodged with the respondent - LIC but they did not respond till 07.01.2004. Again the petitioner wrote a letter on 07.01.2004 through registered post for payment of the claim but of no use. On 09.02.2004, the petitioner sent another reminder to the respondent to pay the amount but of no avail. The respondent paid the amount of only two policies.
3. The respondent paid the amount for the two policies bearing no. 170241394 for Rs.25,000/- and no. 172026654 for Rs.25,000/- on 24.02.2004 after a period of one year for which the petitioner was entitled for interest. Petitioner after making payment of these two policies the respondent started to press the petitioner to withdraw the present claim of Rs. 3.00 lakh, which was gross injustice with the petitioner.
4. The petitioner therefore, prayed that the respondent be directed to make the payment of policy no. 17237157 for Rs. 3.00 lakh along with up to date interest and to pay interest on two policies which were paid on 24.02.2004 after the expiry of one year and also to pay Rs.1.00 lakh as compensation on account of mental agony and harassment and also to pay Rs.2000/- towards the cost of proceedings.
5. In their reply before the District Forum the respondent/ opposite party admitted that the complainant had lodged a claim in the month of February 2004 and submitted the original death certificate. But the original policy bonds were not submitted which were waived as a special case and payment was made under policy nos. 170241394 and 172026654 immediately after receipt of requirements for settlement of claim to the respective nominees. Since, the claim was non-early under these policies it was not required to investigate the genuineness of the claim. The respondents as such released payment immediately after receipt of requirements. However, under policy no. 172371571 for Rs. 3.00 lakh the date of commencement of risk was 28.12.2000. The claim was an early claim as the death had occurred within two years. The claim was thus required to be investigated regarding genuineness of the claim and as such the claim was pending for consideration. However, preliminary enquiries showed that the deceased Life Assured had some serious ailments before proposal which had ultimately resulted in his death. The complaint was premature as the respondents had not completed investigation and that the claim was still pending for consideration. As per IRDA guidelines the respondents were required to consider the claim within six months from receiving requirements. The petitioners had submitted the requirements only in the month of February 2004 as such the claim could be considered up to August 2004 within the time frame as prescribed by Insurance Regulatory and Development Authority of India.
6. The petitioners were not entitled to any interest on claim under policy nos. 170241394 and 172026654 which had settled expeditiously in the month of February 2004 on receipt of Death Certificate. The respondents had even waived of the requirements of furnishing the original policy bond in the interest of petitioners as a special case after obtaining the necessary indemnity bond etc. It was denied that the respondents had pressurized the petitioner to withdraw the claim of Rs. 3.00 lakh. The respondents had not caused any harassment to the petitioners.
7. The District Consumer Disputes Redressal Forum, Yamuna Nagar at Jagadhri ('the District Forum') vide its order dated 05.03.2007 had allowed the complaint and directed the respondent "to pay the insured amount of Rs.3.00 lakh against the policy no. 172371571 along with up to date interest at the rate of 12% per annum after three months of the death of the deceased Joginder Kumar and as per the law laid down by the National Commission that the claim should have been settled within three months the amount of payment of policy no. 172026654 and 170241394 was paid in the month of August 2004 whereas it should have been settled up to 07.04.2003. As such the complainants are also entitled for the amount of interest at the rate of 12% per annum on the said policies also from April 2003 to August 2004 and pay Rs.5000/- as litigation expenses".
8. Aggrieved by the order of the District Forum the respondent filed an appeal before the State Commission. The State Commission vide its order dated 13.01.2011, had accepted the appeal and set aside the order of the District Forum and dismissed the complaint. The State Commission in their order observed as under:
"The undisputed facts are that the deceased has taken three policies bearing no. 172026654 for Rs. 25,000/-, 172371571 for Rs.3.00 lakh and Rs.170241394 for Rs.25,000/- from the opposite party. It has not been disputed the OP - Appellant had paid the amount under policy no. 172026654 and 170241394. However, repudiated the claim with respect to policy no. 172371571 for Rs.3.00 lakh. The ground of repudiation was that life assured was already suffering from diabetes with chronic renal failure. An argument was raised on behalf of the respondents that once OP had paid the claim with respect to two policies they could not repudiate the claim with respect to third policy. It was contended by counsel for the appellant that policy of Rs.25,000/- were paid without any inquiry and investigation therefore, the amounts under those policies was paid. However, policy beyond Rs.25,000/- has to be paid to the legal heir after investigation. The policy was taken out by the life assured on 30.12.2000 while death took place on 07.01.2003. To substantiate their contention OP- Appellant has placed on the file annexure A 4, the answer to question 11 (d) and (2) was given negative and reproduced below:-
11 (d) and (e) Personal History Answer 'yes' or 'no' If 'yes' please give full details
d) Are you suffering from or have ever suffered from ailment for pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system?
No
e) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrosis, leprosy or any other disease?
No While dealing with the contention raised on behalf of the appellant we have to follow the observations made by the National Commission in the case cited as Kokilaben Narendrabhai Patel vs Life Insurance Corporation of India - 2010 CTJ 920 (CP) (NCDRC), which are reproduced under:-
"Insurance - Deficiency in service - Consumer Protection Act, 1986 - Section 2 (I) (g) - Section 2 (I) (o) - Insured died due to heart attack. His wife nominated to receive the insured amount in the event of his premature death. Repudiation of her claim - Allegedly correct answers not given by the deceased regarding his health in the proposal form - Complaint by his wife allowed by the District Forum - State Commission accepted the appeal and set aside the order passed by the Forum - Hence, the present revision petition - Admittedly the insured suffered from Enteric Fever eleven months prior to the taking of the policy- Further, for getting it treated, he even took leave for seventeen days - These two facts not disclosed by him in the proposal form - Non-disclosure thereof was clearly a material fact having a bearing on the risk involved - Repudiation of the claim fully justified - View taken by the State Commission upheld - Revision Dismissed".
Another observation made by the National Commission in the case titled The Marking Manager, LIC of India vs Smt S Vijaya CPC (1995) (1) 341 which is as under:-
"Insurance claim - Complainant's husband had taken a life insurance policy for Rs.30,000/- who dies due to illness - the claim was repudiated on the ground that the deceased had suppressed the fact that he was already suffering from Circhsis of Liver - This fact was revealed from the record of the Hospital - Repudiation of claim justified - Order of State Commission giving relief to the respondent set aside".
The case law cited above is fully applicable in this case.
The District Consumer Forum passed the impugned order by ignoring all these aspects and as such the impugned order being an illegal one cannot be sustained.
For the reasons recorded above, this appeal is accepted, the impugned order is set aside and the complaint is dismissed."
9. Hence, the present revision petition.
10. We have heard the learned counsels for the parties and have carefully gone through the records of the case.
11. Learned counsel for the petitioner has argued that in the instant case Dr R K Gupta, who was stated to be running a private hospital, has issued the certificate wherein he only certified that the deceased remained admitted on 13.01.2002 to 19.01.2002 (for six days only). There was no document on the record as to what treatment was administered to the patient, only entry from the admission register was produced. No document of illness of the deceased was produced before 28.12.2000 when the policy in question had commenced. The State Commission has not appreciated that the ground on which the policy was sought to be repudiated was that the deceased remained admitted from 13.01.2002 to 19.01.2002, i.e., after the policy in question commenced with effect from 28.12.2000. It was not the case that the deceased before entering into the contract with the respondent was critically ill and had suppressed the material facts. Further, the State Commission had failed to appreciate that the respondent cleared the other two policies bearing no. 172026654 for Rs.25,000/-, 1720241394 for Rs.25,000/- without any objection but withheld the amount of policy in dispute arbitrarily and without any basis whatsoever.
12. On the other hand, the learned counsel for the respondent has contended that it was clear from the records/ documents on file that the deceased had withheld the material information regarding his health at the time of taking the insurance policy no. 172371571 for Rs. 3.00 lakh. The respondent were hence, justified in repudiating the claim. In the repudiation letter, the respondent had written to the petitioner that:
"With reference to your claim under the above policy on the life of your deceased husband we have to inform you that we have decided to repudiate all liability under the policy on account of the deceased having with held material/ correct information regarding his/ her health at the time of affecting the assurance with us.
In this connection we have to inform you that in the proposal form for assurance dated 30.12.2000 signed by the deceased assured on 30.12.2000 at the time of his/ her medical examination on 30.12.2000, he had answered the following questions as under:
QUESTION ANSWERS 11 (d) Are you suffering from or have ever suffered from ailment for pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system?
NO 11 (c) Are your suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrosis, leprosy or any other disease NO What has been your usual state of health NO We may, however, state that all these answers were false as we have evidence/hold indisputable proof to show that about 10.04.2003 before he/ she proposed for the above policy he had been suffering from diabetes last ten years, kidney problem for which he had consulted a medical man and had taken treatment from him in a Hospital and was on medical leave for months/ days from _______. He did not however, disclose these facts in his/ her proposal form instead he gave false answers therein as state above.
It is, therefore, evident that he/ she had made deliberate mis-statements and with held material information from us regarding his/ her health at the time of effecting the assurance and hence, in terms of the policy contract and the declaration contained in the forms of proposal for assurance, we hereby repudiate the above claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belong to us.
From your information we are enclosing herewith copy of the proposal and personal form above".
13. Learned counsel for the petitioner also drew our attention to the Certificate of hospital treatment given by Dr R K Gupta, the treating physician, who has clearly stated therein that Shri Joginder Kumar had been suffering from diabetes and chronic renal failure. He suffered from diabetes from the last 14-15 years and CRF for the last 4-5 years. He also drew our attention to the certificate of Dr R K Gupta, MD wherein he has recorded as under:
"Certified that Mr Joginder Kumar son of Shri Katam Chand received hospitalization from 13.01.2002 to 19.01.2002. He was suffering from IDDM, Chronic Renal Failure, Petinogelling (not legible). He has diabetes for the last about more than 10 years (not legible).
Sd/-
Dr R K Gupta MD"
14. Dr R K Gupta was summoned and examined and appeared as witness before the District Forum. The statement of Dr R K Gupta is as under:
"Stated that I am MBBS, MD (Medicine), I am running this hospital for the last more than 21 years. Shri Joginder Kumar son of Shri Katam Chand resident of village Mugalwali was under my treatment for the last more than ten years. He was known case of disease for the last more than ten years. He was hospitalized a number of times in my hospital in the last ten years for the treatment of diabetes. He was also hospitalized in my hospital, with effect from 13.01.2002 to 19.01.2002 and I have issued a certificate in this regard which bears my signature. The renal failure is possibly because of diabetes I have also issued a certificate i by me which bears my signatures as per the certificate the patient was diabetic for the last 14-15 years as per the certificate he was more ill for the last 4-5 years. I had referred him to PGI for his treatment of total ailment.
Xxxxxxx Shri Salbir Singh, counsel for the complainant.
I am not having the available record of the treatment of the patient before reaching diagnosis of renal failure, we do perform certain blood and urine tests. I have not recorded regarding the same. Those patients of diabetes when they take proper treatment for diabetes remain alright. If they take proper treatment they remain normal for 30 to 40 years of life after developing diabetes. It is correct that I was giving him proper treatment, he was taking the treatment properly and doing well treatment."
15. We have given our thoughtful consideration to the case. It is an undisputed fact that the petitioner's husband Joginder Kumar had taken three policies. His two policies of Rs.25,000/- each were paid without investigation. Policy no. 172371571 was purchased on 30.12.2000 was for Rs. 3.00 lakh. Shri Joginder Kumar died on 07.01.2003. As it was an early claim it was investigated. On investigation it came to the notice that Joginder Kumar had been suffering from diabetes for the last 14-15 years and suffered from chronic renal failure for the last 4-5 years. These facts had been suppressed/ not mentioned in the proposal form. Though the learned counsel for the petitioner stated that the treatment by Dr R K Gupta and the records produced by him were not correct and accurate, they did not cross-examine Dr R K Gupta to rebut his evidence. There is no evidence on record to prove that the information given by Dr R K Gupta regarding the health status of Shri Joginder Kumar was incorrect.
16. The Hon'ble Apex Court in the case of Satwant Kaur Sandhu vs New India Assurance Company Ltd., - IV (2009) CPJ 8 (SC) has held that:
MacGillivray on Insurance Law (Tenth Edition) has summarized the assured's duty to disclose as under:
"----the assured must disclose to the insurer all facts material to an insurer's appraisal of the risk which are known or deemed to be known by the assured but neither known nor deemed to be known by the insurer. Breach of this duty by the assured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms".
Over three centuries ago, in Carter vs Boehm 4 (1766) 3 Burr. 1905 Lord Mansfield had succinctly summarized the principles necessitating a duty of disclosure by the assured, in the following words:
"Insurance is a contract of speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the assured only; the underwriter trust to his representation, and proceeds upon confidence that he dies not keep back any circumstances in his knowledge to mislead the underwriter into a belief that the circumstances does not exist. The keeping back such circumstances is a fraud, and therefore, the policy is void. Although the suppression should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived and the policy is void; because the risqui run is really different from the risqué understood and intended to be run at the time of the agreement.... The policy would be equally void against the underwriter if he concealed...... Good faith forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of the fact, and his believing the contrary".
The upshot of the entire discussion is that in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a 'material fact'. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his 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."
The laws cited above are fully applicable to the facts of this case.
17. Hence, we are of the considered view that the State Commission has committed no error in accepting the appeal of the respondent and setting aside the order of the District Forum and dismissing the complaint.
18. The Hon'ble Supreme Court in Mrs Rubi (Chandra) Dutta vs M/s United India Insurance Co. Ltd., 2011 (3) Scale 654 has observed:
"Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."
19. Thus, we find that no jurisdictional or legal error has been shown to us in the impugned order to call for interference in the exercise of powers under Section 21 (b) of Act. The order of the State Commission does not call for any interference nor does it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is hereby, dismissed with no order as to cost.
......................J V.B. GUPTA PRESIDING MEMBER ...................... REKHA GUPTA MEMBER