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State Consumer Disputes Redressal Commission

The Life Insurance Corporation Of India vs Rekha Shrirang Bharate on 21 March, 2014

                                 Page 1 of 12
                                 FA/No.210/2009

MAHARASHTRA STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MUMBAI CIRCUIT BENCH AT AURANGABAD.
                                           Date of filing :28/01/2009
                                           Date of order : 21/03/2014

FIRST APPEAL No : 210 of 2009
IN COMPLAINT CASE NO : 294 OF 2008-
DISTRICT CONSUMER FORUM: OSMANABAD.

The Life Insurance Corporation of India
Divisional Office Jivan Prakash Adalat road,
Aurangabad through its Manager ( L & HPF),
Prakash Laxmanrao Kulkarni,
R/o.LIC Quarters Adalat road,
Aurangabad.                                            APPELLANT

          VERSUS

Rekha Shrirang Bharate
R/o.Para Tq. Vashi,
Dist. Osmanabad.                                       RESPONDENT

Coram : Mr.S.M.Shembole, Hon'ble Presiding Judicial Member.

Mr.K.B.Gawali, Hon'ble Member.

Present : Adv.Shri. S.R.Malani for the appellant.

Adv.Shri.G.V.Mohekar for the respondent 1.

JUDJGMENT ( Delivered on 21th March, 2014 ) Per. Mr.K.B.Gawali, Hon'ble Member.

1. This appeal is filed by the original opponent No. 1 against the judgment and order dated 24/12/2008 passed by the Dist. Consumer Forum, Osmanabad in CC.No. 294/2008 whereby the complaint is allowed and the appellant is directed to pay insurance sum of Rs 1,00,000/- along with benefit with interest @ 9 % p.a. Page 2 of 12 FA/No.210/2009 from 27/02/2008 onwards within a period of 30 days and Rs 1000/- as a cost of the complaint. The respondent herein is the original complainant. For better understanding the appellant which is representing the division office of LIC of India, is herein after termed as the "opponent insurance company" whereas the respondent as the "Complainant"

2. The facts of the case in brief are that the deceased husband of the complainant namely Shrirang Ashroba Bharate was a employee of the Maharashtra Gramin bank Washi Dist. Osmanabad. That, during his life time and his service tenure in the said bank he had obtained insurance policy bearing No. 984176756 for Rs 1,00,000/- and died on 23/03/2006. During the operation of the said insurance policy. That following the death of Shrirang, his wife who was nominee in the said insurance policy had submitted insurance claim proposal with the opponent insurance company. However, the said claim was repudiated on the of suppression of material fact about the health of the insured and therefore alleging deficiency in service on the part of the insurance company she filed the complaint before Dist. Consumer Forum seeking direction to the opponent insurance company to pay her an insurance amount of Rs 1,00,000/- along with Rs 25,000/- towards mental torture and Rs 5000/- as cost of the proceeding with interest at 12 % p.a.

3. The opponent insurance company appeared before the Dist. Consumer Forum and by way of its written version it has contested Page 3 of 12 FA/No.210/2009 the claim of the complainant. It had admitted to have issued the said policy but denied the claim of the complainant. It was contended that the insurance claim of the complainant was repudiated on the ground of suppression of material fact about the health of the deceased policy holder. That, the fact of withholding the information under the colum No. 11(a), 11(©), and 11 (i) of the policy proposal submitted by him, was revealed during the investigation. It was contended that the deceased Shrirang Bharate had suffered from PEO with anemia for which he had taken medical treatment of the same prior to obtaining of the policy. It has also produced documents regarding the medical leave for the period from 20/12/2003 to 12/01/2004 and further 17/05/2004 to 17/06/2004 which was obtained by the deceased policy holder on medical ground. The opponent insurance company has also submitted medical certificate issued by Dr.Patewar certifying that the deceased Shrirang Bharate was suffering from PEO with anemia during the period of leave as obtained by him It was further contended that deceased Shrirang Bharate submitted the policy proposal on 25/03/2005 and he died on 23/03/2006 that within a period of about one year. It was therefore contended that the insurance claim of the complainant has rightly repudiated by opponent insurance company by its letter dated 27/02/2007 and hence there was no deficiency in service on the part of the insurance company. Therefore, the complaint being false and baseless be dismissed.

4. The Dist. Consumer Forum after considering the evidence on record and hearing the parties to the dispute has allowed the complaint by way of its impugned judgment and order. It is held by the Dist. Consumer Forum that the opponent insurance company has not produced any cogent documentary evidence except the record of leave of the deceased insured and medical certificate of the doctor etc. for supporting that the deceased namely Shrirang was suffering from the said disease prior to submission of the insurance proposal. In support of the view taken by the Dist. Consumer Forum in his judgment and order, it has relied on various case laws including the case law in respect of the case - Life Insurance Corporation of India V/-s Devidas Shirsode, 2006 CTJ 669 (CP) (NC) and also the other case law pertaining to Life Insurance Corporation of India -V/s- Nishar Khan, 2006 CPJ 428 (CP) (NC). It is held by the Dist. Consumer Forum that the deceased Shrirang Bharate was died in road accident which is very well proved on the basis of documents submitted before the Dist. Consumer Forum. Hence, the ratio given in case law pertaining to LIC of India -V/s- Nishan Khan (supra) in which Hon'ble National Commission has held that if the policy holder is died not due to the disease alleged to be suppressed, the insurance company is under obligation to pay the insurance sum. Thus, in keeping with this observation the Dist. Consumer Forum has allowed the complaint and passed the impugned judgment and order directing the opponent insurance company to pay the insurance sum etc. as mentioned above.

5. Feeling aggrieved by the said judgment and order the present appeal is filed in this Commission by the opponent insurance company. This appeal was finally heard on 10/03/2014. Adv.Shri.S.R.Malani was present for the appellant however, respondent /complainant Smt.Rekha Bharate as well as her counsel Shri.G.B.Mohekar and Shri. Ranjit Gaikwad were absent but the counsel for both side have already submitted written notes of arguments. We heard Shri.Malani Ld. Counsel for the appellant finally and appeal was adjourned for judgment and order

6. The Ld. Counsel Shri. Malani for the appellant by way of his arguments submitted that as per the investigation carried out by the opponent insurance company it was revealed that the deceased Shrirang Bharate was suffering from PEO with Anemia prior to obtaining of the insurance policy. That, the insurance company has also submitted the copy of the medical certificate issued by Dr. G.V.Paddewad to whome the deceased Shrirang Bharate had consulted. That, the insurance company has also submitted copies of the leave sanction order for the period 29/12/2003 to 12/01/2004 and further from 17/05/2004 to 17/06/2004 as availed by the deceased Shrirang Bharate on medical ground from his employer Marathwada Gramin Bank. The Ld. Counsel Shri. Malani further contended that since the deceased insured died prior to one year and therefore as per Sec. 45 of the Insurance Act it was not necessary for LIC to establish that the information about Page 6 of 12 FA/No.210/2009 previous illness was with held with malafied intention. Therefore, the opponent insurance company has rightly repudiated the insurance claim of the complainant on the ground of suppression of material fact and with holding of information pertaining to his illness. In support of his above said contention he relied on the following case laws.

He therefore contended that the Dist. Consumer Forum without considering the legal position and facts of the case has erroneously passed the impugned judgment and order directing the opponent insurance company to pay the insurance sum as well as cost of the proceeding. Hence, the said judgment and order be quashed and set aside. In support of his aforesaid contention he relied on the following citations of Hon'ble National Commission.

1. RP.No.1987 2006- Kokilaben -V/s- LIC dated 05/04/2010, wherein it is held that non discloser of fact by the insurer from typhoid in the month prior to taking of the policy or he had been 17 days on leave for getting treatment for material fact and therefore contract of insurance is void.

2. RP.No.1316/2008-Kapil Rai Singhani -V/s- LIC dated 27/01/2009, wherein Hon'ble National Commission held LIC relied on documents which were obtained from the government department were the life assured was working as the Dy.Director, there is no reason to disbelieve the documents and therefore repudiation is upheld.

3. RP.No.1974/2004-Maria -V/s- LIC dated 28/07/2005, wherein it is held that assured was known diabetes patient and also hospitalized and availed leave on medical ground on several occasions but the negative answer were given in the proposal form and therefore suppression of facts was material and repudiation is justified.

4. RP.No.1935/1999-LIC -V/s- Krishan Sharma dated 23/01/2006, wherein it is held that ultimate cause of death of deceased has no relevancy to the disclose of the information regarding health as required clauses of the proposal form.

7. On the other hand Ld. Counsel Shri. Mohekar for the complainant submitted that the opponent insurance company has repudiated the claim without any sufficiency documentary evidence except leave record and medical certificate of the deceased. He submitted that it was obligatory on the part of the opponent insurance company to produce the certificate of the concerned doctor in support of the alleged disease. He further submitted that the deceased was died not because of the disease alleged to have been suppressed but due to road accident. He further submitted that at the time of issuing of policy to the insured he was checked by the panel doctor and certificate of good health was also issued by the insurer and therefore he submitted that it was totally unjustified on the part of the insurance company to repudiate the claim of the complainant. In support of his aforesaid contention he relied on interalia the following citations:

a. II (2005) CPJ (NC) in the matter of LIC of India -V/s- Badri Nageshwarrama (deceased) and others. Wherein Hon'ble National Commission has held that the deceased who was an old TB patient with diabetes, not knowing the same at the time of filing of the insurance proposal and hence burden to prove the false representation and suppression of facts lies on insurance company that the doctor's certificate without affidavit in support can not be the basis for repudiating the claim. That, there was no conclusive evidence produced to suggest suppression on the part of the deceased and hence insurance company was liable under policy.

B II (2005) CPJ 12 (NC) in the matter of National Insurance Company Ltd -V/s- Bipul Kundu in which Hon'ble National Commission has held the burden to prove the suppression of material fact lies on the insurer. The statement frequently made by the policy holder with knowledge of falcity not proved hence repudiation was not justified.

The Ld.counsel Shri. Mohekar further contended that the case law cited by the Ld. Counsel for the appellant are not applicable to the present case as in the said citation death of the insured has been caused due to illness as alleged by the LIC is suppressed by the insured while submitting the proposal form for obtaining insurance policy. However, in the present case death of the insured was occurred due to road accident and not by the disease alleged to be suppressed by the opponent insurance company. He thus contended that the Dist. Consumer Forum has rightly considered Page 9 of 12 FA/No.210/2009 the case of the complainant and has rightly passed the impugned judgment and order which be confirmed.

8. We have carefully gone through the record containing copies of the complaint, written version filed by the opponent insurance company, medical certificate and the leave record as submitted by opponent insurance company. The impugned judgment and order , appeal memo and written notes of arguments along with the case laws. The crux of the matter is whether the repudiating the claim of the complainant the opponent insurance company has incurred the alleged deficiency in service.

9. The undisputed facts of the case are that the complainant's deceased husband namely Shrirang Bharate had obtained the insurance policy in question and that he died on 23/03/2006 due to road accident. The main dispute raised by the opponent insurance company is about the suppression of material fact about the illness of the deceased Shrirang Bharate and giving incorrect information in the insurance proposal. It is the case of the opponent insurance company that after receiving the insurance proposal from the complainant it has investigated the matter during which it was transpired that the deceased Shrirang Bharate had suffered from the disease of PEO with Anemia for which he had taken treatment from the doctor. However, while submitting the proposal form for obtaining insurance policy he had given incorrect information under the column No. 11(a), 11(©) and 11 (i) of the proposal . It was therefore contended that the opponent insurance company was not Page 10 of 12 FA/No.210/2009 under obligation to sanction the claim of the complainant as there was breach of trust on the part of the deceased policy holder

10. However, the aforesaid grounds of repudiating insurance claim of the complainant have not been justified with cogent evidence. As rightly pointed out by the Dist. Consumer Forum the opponent insurance company has filed leave record showing that the deceased Shrirang Bharate had availed leave on medical ground i.e on 18/06/2004 for the period from 17/05/2004 to 17/06/2004 (32) days and further on 16/01/2004 for the period from 29/12/2003 to 12/01/2004 (15 ) days and secondly at the time of obtaining said leaves the deceased Shrirang Bharate from Dr.G.V.Paddewad however, there is no affidavit of the said doctor who has given certificate and therefore as per the case laws relied on by the Ld. Counsel Shri. Mohekar for the appellant in case of LIC of India -V/s- Badri Nageswaramma (deceased) and others (Supra) It is clearly held by the Hon'ble National Commission that doctor's certificate without affidavit in support is no basis for repudiating the claim. As there was no conclusive evidence produced to suggest suppression on part of deceased. He has also relied on the case law as referred by the Dist. Consumer Forum in the matter of LIC of India -V/s-Nishar Khan. As discussed above in this case law the Hon'ble National Commission has held that if the disease alleged to have been suppressed and the disease due to which the policy holder is died are different, the insurance claim can not be repudiated Page 11 of 12 FA/No.210/2009

11. As pointed out by the Ld. Counsel Shri. Mohekar for the complainant that the case laws relied on by the Ld. Counsel Shri. Malani for the appellant are not exactly applicable to the present case as the fact and circumstances of those cases are different from the same which exist in the present case. That, in all these cases the death of the policy holder is caused due to illness said to have been suppressed by the insured. However, in the present case the death of the policy holder is occurred due to road accident.

12. We are therefore of the considered view that the repudiation of the insurance claim of the complainant by the opponent insurance company is not justified. We therefore find that the Dist. Consumer Forum has rightly allowed the complaint considering all these aspects. Therefore the appeal being devoid of any merit deservers to be dismissed. In the result we pass the following order.

ORDER

1. Appeal is dismissed.

2. No order as to cost.

5. Copies of the judgment and order be sent to both the parties.

             K.B.Gawali                                 S.M.Shembole
               Member                              Presiding Judicial Member

A.H.Patil
Steno H.G.
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FA/No.210/2009