State Consumer Disputes Redressal Commission
Harwinder Kaur vs Life Insurance Corporation Of India on 18 January, 2023
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
PUNJAB, DAKSHIN MARG, SECTOR -37 A, CHANDIGARH
First Appeal No.140 of 2022
Date of Institution : 21.02.2022
Reserved on : 03.01.2023
Date of Decision : 18.01.2023
Harwinder Kaur W/o Late Sh. Gurmukh Singh, Village Baroti, Post
Office Chohal, Hoshiarpur.
.....Appellant
Versus
1. Life Insurance Corporation of India, Mall Road, Near Shimla
Pahari, Hoshiarpur, through it's Branch Manager.
2. Life Insurance Corporation of India, Northern Zonal Office, 12th
Floor, Jeevan Bharti Building, 124, Connaught Circus, New
Delhi-110001.
.....Respondents
First Appeal under Section 41 of
Consumer Protection Act, 2019 against
the order dated 29.12.2021 passed by the
District Consumer Disputes Redressal
Commission, Hoshiarpur.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Ms. Simarjot Kaur, Member
Present:-
For the appellant : Sh. Baldev Singh, Advocate
For the respondents : Sh. Deepak Arora, Advocate
1) Whether Reporters of the Newspapers
may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported
in the Digest? Yes/No
2
First Appeal No.140 of 2022
JUSTICE DAYA CHAUDHARY, PRESIDENT:-
The appellant/complainant-Harwinder Kaur, the wife of deceased Gurmukh Singh, has filed the present appeal under Section 41 of the Consumer Protection Act, 2019, as amended upto date (in short the 'Act') being aggrieved by the order dated 29.12.2021 passed by the District Consumer Disputes Redressal Commission, Hoshiarpur (hereinafter referred as the "District Commission") whereby the complaint filed by her was dismissed.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Briefly, the facts of the case as made out by the complainant before the District Commission are that the husband of the complainant namely Gurmukh Singh purchased a Life Insurance Policy from the respondents/OPs i.e. policy No.133938237 dated 27.03.2014 for a sum assured of Rs.5,00,000/-. The premium amount was to be paid by yearly installment of Rs.17,945/-. Prior to purchasing the said policy, the medical of the insured was got conducted by Dr. Herra and ECG by Dr. Uppal regarding his health condition. However the husband of the complainant expired on 24.11.2016 after a period of approximately two years and seven months. The intimation of death of the insured was given to the OPs. The complainant being the nominee of the insured applied for claim of insurance policy but it was repudiated by the Insurance Company 3 First Appeal No.140 of 2022 vide letter dated 25.03.2017 on the ground that the deceased insured had not disclosed his previous medical history and suppressed certain material facts. The complaint was filed with the prayer for issuance of direction to the OPs to pay the full amount of sum assured i.e. Rs.5,00,000/- as well as Rs.50,000/- as compensation for causing harassment, agony and mental tension suffered by the complainant at the hand of the OPs and also an amount of Rs.25,000/- as cost of litigation.
4. Said complaint was opposed by the OPs. Written reply was filed on behalf of the OPs wherein certain preliminary objections were raised stating therein that the complaint was not maintainable and also that certain material facts were wilfully concealed at the time of filling up the Proposal Form. Certain answers given by the life assured were found false. There was a material concealment that the deceased earlier got examined himself from Kidney Hospital and Lifeline Medical Institution, Jalandhar on 29.12.2012, wherein it was found that he was suffering from Alcohol Liver Disease (ALD) with Cirrhosis of liver as he was addicted to liquor. Further it was mentioned that Upper GI Endoscopy was also done of the life of assured on 29.12.2012 and it was found that he was suffering from OESOPHAGUS GR II X 3 Varices and severe Gastritis, Duodenitis. He was also suffering from obesity as his weight was found to be more than 100 KG.
4First Appeal No.140 of 2022
5. The other contents of the complaint were denied by giving details in the reply. It was also mentioned in the reply that the claim of the complainant was rightly declined by relying upon certain documentary evidence in detail and the complainant was not found entitled for any claim after the death of her husband.
6. After considering the contents of complaint, reply thereof filed by the OPs and on hearing the arguments raised by counsel for both the parties, the District Commission had dismissed the complaint vide order dated 29.12.2021. The relevant portion as mentioned in para 9 of the said order is reproduced as under:-
"9. For all that has been discussed herein-above, we are of the considered opinion that the repudiation of the claim of the complainant has been rightfully done on the grounds of suppression of material fact and is hereby sustained. The view of this Commission is being fortified by the recent judgment dated 09.10.2020 rendered by Hon'ble Supreme Court of India in 'Branch Manager, Bajaj Allianz Life Insurance Company Limited versus Dalbir Kaur' Civil Appeal No. 3397 of 2020 wherein it has been held that in case the insured fails to disclose about his correct state of health and serious pre- existing medical condition to the insurance company, he is not entitled to any claim on the basis of false 8 declaration/concealment of material fact. Resultantly, the complaint stands dismissed. The certified copy of this judgment be supplied to all the parties free of costs and thereafter the file be consigned to the records after indexation." 5 First Appeal No.140 of 2022
Said impugned order dated 29.12.2021 passed by the District Commission has been challenged by the complainant before this Commission by raising a number of arguments.
7. Mr. Baldev Singh Advocate, learned counsel for the appellant submits that the District Commission has passed the impugned order without taking into consideration the oral arguments and by ignoring the evidence produced by the complainant. Learned counsel has also submitted that it is a case of misreading of evidence. The terms and conditions of the policy were never explained to the insured and he never signed the declaration to the effect that the terms and conditions of the policy were fully explained. Learned counsel further submits that as per the Provisions of Section 45 of the Insurance Act, 1938 prior to amendment dated 26.12.2014, no policy of life insurance could be called in question by the Insurer on the ground that the statement made in the Proposal Form for insurance was inaccurate or false or the purchaser of the policy had suppressed the material fact on the expiry of period of two years from the date on which it was effected. Learned counsel has further submitted that the policy was effected in the present case from 27.03.2014 and the insured expired on 24.11.2016 after a period of more than two years and seven months and as such the case of the appellant/complainant was covered by the provisions of Section 45 of the Insurance Act, 1938 as it cannot be made applicable after the expiry of period of two years. Learned counsel has further submitted that the husband of the complainant was Matriculate and was not well 6 First Appeal No.140 of 2022 versed with the technical terms and all the entries were filled up by the Agent and for that purpose the policy holder could not be blamed on the ground that wrong answers were given. The insured was simply asked to put his signatures on the Proposal Form and answers were filled up by the Agent only which is reflected from the handwriting available on the record. Further it has been submitted by the learned counsel that the Doctor namely Dr. Alok Sehgal who had treated the insured as alleged by the respondents/OPs but he was neither examined before the District Commission nor his affidavit was placed on record to prove the cause of death. As per the stand of respondents/OPs the assured died due to Cirrhosis of Liver whereas there is nothing on record that the Cirrhosis was of 4th stage and there was any nexus with the death of the insured. Further it has been submitted by the learned counsel for the appellant that the affidavit Ex.OP-7 was incomplete as nowhere it was mentioned therein as to which exhibit the deponent wanted to rely upon as no such document was not exhibited and order by declining the claim was passed only on the basis of assumption and presumption and unexhibited documents could not have been relied upon. Learned counsel has further submitted that before purchasing the policy for insurance the medical of the insured was got done/conducted by the OPs through one Dr. Heera and Dr. Uppal regarding his health condition and after the medical checkup and the assessment of the reports, the OPs assessed the risk of the life of the insured on the 7 First Appeal No.140 of 2022 basis of Proposal Form and other documents and as such the Proposal Form was duly accepted by the OPs.
8. The deceased life assured was duly examined by the medical examiner of the respondents/OPs and subsequently it cannot be said that the assured had concealed certain material facts. Learned counsel has relied upon certain judgments of cases i.e. (1) "Life Insurance Coproation of India Vs. Jaswinder Kaur" 2019(2) CPR 342: 2019 CPJ 313, (2) "Manmohan Nanda Vs. United India Insurance Company Limited" 2022(4)SCC 582, (3) "Kranti Associates Private Limited and another Vs. Masood Ahamed Khan and others" 2010(9)SCC-496, (4) "Jacob Punnen and others Vs. United India Insurance Corporation Limited"
MANU/SC/1212/2021 and (5) "Central Inland Water Transport Corporation Limited & another Vs. Brojo Nth Ganguly and another" 1986 AIR (SC)1571 : 1986 (3)SCC 156 in support of his arguments.
9. Mr. Deepak Arora Advocate, learned counsel for the respondents/OPs has submitted that the order passed by the District Commission is based on proper appreciation of evidence and also by considering all the relevant facts as well as the evidence available on the record. Learned counsel has further submitted that the LIC policy was issued under Plan 84-16-16 to the life assured on 21.03.2014, with the date of commencement to cover the risk w.e.f. 27.03.2014. Life assured had expired within a period of three years i.e. on 8 First Appeal No.140 of 2022 24.11.2016. The claim was rightly repudiated as it was not maintainable in view of provisions of Section 45 of the Insurance Act as the life assured had concealed certain material facts and a fraud was played up on the LIC of India for getting undue benefit of the policy. Learned counsel has also submitted that the life assured was suffering from liver disease prior to filling up the Proposal Form dated 21.03.2014 and while answering certain questions supplied to him like question 11(a) to (g), h(1) and 11(i) regarding his health history he gave wrong answers. Thereafter, a declaration was also singed at the end of the Proposal Form dated 21.03.2014 wherein it was mentioned that in case any incorrect averment was made then the Contract would be cancelled and the money so paid would stand forfeited to the Corporation. Learned counsel has also submitted that in the reply to various questions put by the Doctor who examined him it was specifically mentioned 'No'. It was asked in the question as to whether the insured was ever hospitalized or at the time of filling up the Proposal Form he was undergoing any treatment but against said columns the word 'No' was mentioned. The life assured got himself examined from the Kidney Hospital and Lifeline Medical Institution, Jalandhar on 29.12.2012 wherein it was found that he was suffering from ALD (Alcohol Liver Disease) with Cirrhosis of Liver as was addicted to Alcohol. He was also suffering from OESOPHAGUS GR II X 3 Varices and severe Gastritis, Duodenitis, as per the record maintained by the Hospital. The insured had also visited the Hospital for his treatment on a number of dates i.e. on 29.12.2012, 9 First Appeal No.140 of 2022 11.02.2013, 13.03.2013, 01.07.2014, 14.08.2014, 31.05.2016, 20.06.2016 and 26.07.2016. Further from the Discharge Summary it was clear that he was suffering from ALD. His endoscopy was done by Dr. Vijay Nanda and ultimately the life assured expired on 24.11.2016. Even prior to that he also got treatment from DMC and Hospital, Ludhiana for the period from 20.09.2016 to 24.09.2016 being the case of K/C/O Cirrhosis (Alcohol related) and with Hepatic Encephalopathy. The life assured had also consulted Dr. Ashok Sehgal, MD (Gastro) of Jalandhar on 24.11.2016 being the case of Cirrhosis, Ascites and Multifocal Hepatocellular Cancer and ultimately expired on the same day i.e. 24.11.2016. The claim was repudiated vide letter dated 25.03.2017 vide Ex.OP-14 by passing a speaking order. At the end learned counsel had submitted that in case of insurance contracts, the doctrine of utmost good faith as is known as "Uberrimae Fidei" is very important and the same has been broken in the present case and as such the Contract has become void.
10. Heard the arguments raised by learned counsel for both the parties. We have also carefully perused the impugned order dated 29.12.2021 passed by the District Commission and other documents available on the file and have also gone through the provisions of the Insurance Act, 1938 as pointed out by learned counsel for the parties as well as judgments relied upon by the learned counsel for the appellant.
10First Appeal No.140 of 2022
11. Facts relating to filing of complaint by the complainant before the District Commission and filing of reply by the OPs and thereafter dismissal of complaint by the District Commission vide order dated 29.12.2021 and the appeal filed by the appellant/complainant being aggrieved by the order passed by the District Commission before this Commission are not in dispute. The factum of death of the assured and filing of claim by the complainant, being the nominee/LR of the deceased life assured are not in dispute. Insurance claim has been repudiated on the ground of suppression of certain material facts.
12. Learned counsel for the appellant has relied upon the statutory provisions of Section 45 of the Insurance Act, 1938, which is reproduced as under :-
"45. Policy not to be called in question on ground of mis- statement after two years.--
No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or 11 First Appeal No.140 of 2022 false, unless the insurer shows that such statement 1[was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made] by the policy-holder and that the policy-holder knew at the time of making it that the statement was false 2[or that it suppressed facts which it was material to disclose]:
2[Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.]"
13. On perusal of said provisions, it is apparent that no policy of Life Insurance can been called in question by the Insurer on the ground that the statement as made in the Proposal for insurance was incorrect or false or the purchaser of policy has suppressed the material fact after the expiry of two years from the date on which it was effected.
14. The same issue was before the Hon'ble National Commission in case of Jaswinder Kaur (Supra). The observations as made in para 19 are relevant which are reproduced as under:-
"19. It is very clear that as per Section 45 of the Act in force when the proposal was made and Policy taken, no Insurance Policy can be repudiated after two years on the grounds of the 12 First Appeal No.140 of 2022 concealment/suppression of facts. The amendment to Section 45 providing a period of three years came later in 2014. The present case is covered by this section before its amendment and the deceased died after more than two years nine months after taking the policy."
15. In the present case, the Insurance Policy was issued on 21.03.2014 and the deceased life assured died on 24.11.2016 after a period of two years and seven months. As per Section 45 of the Insurance Act before its amendment, no policy of life insurance could be called in question by the Insurer on the ground that the statement made in the Proposal Form for insurance was inaccurate or false or the purchaser of policy had suppressed the material fact after the expiry of a period of two years from the date on which it was effected. In the present case the policy was effected on 27.03.2014 and the life assured expired on 24.11.2016 which was after a period of more than two years and seven months. Accordingly the case of the appellant/complainant is squarely covered by the provision of Section 45 of the Insurance Act, 1938 being before its amendment. However, on perusal of policy documents Annexure A-4, it is apparent that Section 45 of the Insurance Act, 1938 before its amendment, was reproduced in the policy itself but the same was not taken into consideration by the District Commission while dismissing the complaint. Said judgment passed by the Hon'ble National Commission of case of Jaswinder Kaur (Supra) has attained finality 13 First Appeal No.140 of 2022 as no appeal has been filed by the Insurance Company against the said order.
16. As per the version of the respondents/OPs, the complaint was not maintainable under Section 45 of the Insurance Act, 1938 as it was hit by the Principle of Ubberima Fide and as such the policy was completely based on principle of utmost good faith of both the parties. Being an early death claim, the OPs got conducted and got a claim inquiry report wherein it was found that the deceased life assured had died due to long ailment and he remained as regular outdoor patient of Kidney Hospital and Lifeline Medical Institution, Jalandhar as per the record issued by the Hospital on the request of the OPs. The life assured visited the Hospital on a number of dates for follow up treatment and thereafter he got treatment from other Hospital like D.M.C. and Hospital, Ludhiana for the period from 20.09.2016 to 24.09.2016 as a K/C/O Cirrhosis (alcohol related) with Hepatic Encephalopathy and he also consulted Dr. Alok Sehgal DM (Gastro) of Jalandhar on 24.11.2016 and ultimately expired on the same day. It has further been mentioned in the reply before the District Commission that the life assured was alcoholic and was suffering from serious liver ailment since 29.12.2012 but inspite of full knowledge of the nature of the ailment, he did not disclose the same at the time of filling up the Proposal Form and concealed this fact of ailment from the OPs. The respondents/OPs have relied upon amended Section 45 of the Insurance Act, 1938 with regard to suppression of material fact as life assured died within a period of 14 First Appeal No.140 of 2022 three years from the date of issuance of the policy. However, the amended provisions of Section 45 of the Insurance Act, 1938 would not be applicable in the present case as the amendment came into force on 26.12.2014 and the policy in question was issued on 27.03.2014 prior to the date of amendment.
17. Undisputedly, the life assured had been taking treatment of liver disease since 29.12.2012 in different Hospitals and this fact has also not been denied in the arguments before this Commission and the life assured was also well aware about his ailments due to which he remained admitted in the hospital and he had not disclosed these facts in the Proposal Form. Although a plea has been taken that the Proposal Form was filled up by the Agent and life assured only signed the Proposal Form. However, the plea of suppression of material fact could have been helpful to the respondents/OPs had this be taken within a period of two years from the date of issuance of the insurance policy. This argument is not going to helpful as this Provisions of Section 45 of the Insurance Act, 1938 was also specifically mentioned in the policy documents.
18. In view of facts as discussed above and also in view of the provisions of Section 45 of the Insurance Act, 1938 as reproduced above as well as the judgment of the Hon'ble National Commission, we find merit in the contentions raised by learned counsel for the appellant. Accordingly, the appeal deserves to be allowed and the same is allowed and the impugned order passed 15 First Appeal No.140 of 2022 by the District Commission is hereby set aside with the following directions to the respondents/OPs:-
(i) to pay the claim amount of Rs.5,00,000/- to the appellant/complainant alongwith interest @9% per annum from the date of repudiation of the claim till the actual realization: and
(ii) to pay the cost of litigation to the tune of Rs.15,000/-.
The respondents/OPs are directed to comply the order within 30 days from the date of receipt of certified copy of the order failing the appellant/complainant would be entitled to interest @18% per annum on the claim amount from the dates as referred above
19. Since the main case is decided, the pending applications, if any, are also disposed of.
20. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases and due to pandemic of Covid-19.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (SIMARJOT KAUR) MEMBER January 18, 2023 (MM)