State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Smt. Sheela Devi on 2 March, 2010
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
S.C.O. NO.3009-10, SECTOR 22-D, CHANDIGARH.
First Appeal No. 1192 of 2004
Date of Institution : 29.09.2004
Date of decision : 02.03.2010
Life Insurance Corporation of India through Authorised Officer, Manager
(L&HPF), Divisional Office, Sector 17, Chandigarh.
...Appellant
Versus
1. Smt. Sheela Devi wife of Sh.Prem Parkash resident of House
No.638, Sector 15, Old Bishan Nagar, Patiala.
2. Sh.Prem Parkash s/o Sh.Prabh Dayal, resident of H.No.638, Sector
15, Old Bishan Nagar, Patiala.
...Respondents
First Appeal against the order dated
20.8.2004 of the District Consumer Disputes
Redressal Forum, Patiala.
Before:-
Hon'ble Mr.Justice S.N.Aggarwal, President.
Mrs.Amarpreet Sharma, Member.
Present:-
For the appellants : Sh.B.J.Singh, Advocate.
For the respondents : Sh.Sandeep Chopra, Advocate.
JUSTICE S.N. AGGARWAL, PRESIDENT
Madan Gopal son of the respondents had taken the life insurance policy from the appellants on 28.5.2000 for an amount of Rs.1 lac for a period of 20 years. He was 33 years of age at that time. He made the payment of premium instalments from time to time regularly till June, 2002. He died suddenly due to heart attack on 8.7.2002. The insurance claim was lodged with the appellants. It was repudiated. Alleging deficiency in service on the part of the appellants, the respondents filed a complaint before learned District Consumer Disputes Redressal Forum, Patiala (in short "District Forum") for insurance claim. Compensation, interest and claim were also prayed.
First Appeal No.1192 of 2004 2
2. The appellants filed written reply. It was admitted that Madan Gopal had taken the insurance policy from the appellants by filling proposal form on 28.5.2000. It was for an amount of Rs.1 lac and the maturity date was after 20 years. Smt.Sheela Devi respondent being his mother was the nominee. It was also not denied that Madan Gopal had died and the insurance claim lodged by the respondent was repudiated. It was pleaded by the appellants that life assured was suffering from Pleural Effusion. He had taken the medical treatment from Amar Hospital, Patiala for the period from 2.6.1999 to 13.7.1999. He failed to disclose this factual position in the proposal form. Therefore, he has committed breach of good feaith. Therefore, repudiation was legal and valid. Dismissal of the complaint was prayed.
3. Smt.Sheela Devi respondent filed her affidavit Ex.C1. The respondents also filed the affidavit of Inder Singh as Ex.C2. The respondents also proved documents Ex.C3 to Ex.C11.
4. On the other hand, the appellants filed affidavit of J.P.K.Minhas as Ex.R1 and the affidavit of Dr.Sudip Singh as Ex.R2. The appellants also proved documents Ex.R3 to Ex.R13.
5. After considering the pleadings of the parties and the affidavits/ documents produced on file by them, the learned District Forum accepted the complaint with costs of Rs.500/- vide impugned order dated 20.8.2004 and directed the appellants to pay the insurance claim with interest @ 9% per annum.
6. Hence the appeal.
7. Submission of learned counsel for the appellants was that the appeal be accepted and impugned order dated 20.8.2004 be set aside.
8. On the other hand, submission of learned counsel for the respondent was that there is no merit in the present appeal and appeal be dismissed.
9. Record has been perused. Submissions have been considered. First Appeal No.1192 of 2004 3
10. The admitted facts are that Madan Gopal was the son of the respondents. He had taken life insurance policy from the appellants by filling proposal form on 28.5.2000 (Ex.R3) in which he had shown his mother Sheela Devi respondent as his nominee. As per information given in clause 11 of the proposal form Ex.R3, the appellant had not consulted any medical practitioner for any ailment. He had not remained absent from his place of working for health reasons for the last 5 years. He had never suffered from ailment pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System. He was also not suffering from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epliepsy, Hernla, Leprosy, or any other disease and he was having good health (Ex.R3).
11. In order to prove that life assured had suppressed the material information, the appellants have tried to prove that infact the life assured was suffering from material disease and he had remained on leave from the office also.
12. The appellants have proved the certificate of employer as Ex.R8, according to which Madan Gopal was on leave from 2.6.1999 to 13.7.1999 and from 30.8.2001 to 17.9.2001.
13. The appellants also proved the medical certificate given by Dr.Sudip Singh dated 2.6.1999 as Ex.R9. According to it Madan Gopal was suffering from Pleural Effusion and he was required to be on leave with effect from 2.6.1999 to 29.6.1999. However, certificate dated 30.6.1999 has been proved as Ex.R10, which recommended leave for 2 weeks for the period from 30.6.1999 to 13.7.1999.
14. The appellants had also proved the certificate given by Amar Hospital as Ex.R12 according to which Madan Gopal was suffering from Pleural Effusion and was under treatment from 2.6.1999 to 13.7.1999.
15. The appellants therefore, have succeeded to prove that Madan Gopal was suffering from Pleural Effusion disease from 2.6.1999 to First Appeal No.1192 of 2004 4 13.7.1999, while he had taken the insurance policy by filling the proposal form on 28.5.2000 Ex.R3. In this proposal form, he had not given the information relating to his disease.
16. The settled law is that concealment of every information does not authorise the insurance companies to repudiate the claim. The information suppressed must be material and it must be intended to defraud the insurance company. It was held by the Hon'ble Supreme Court of India in judgment reported as Mithoolal Nayak Vs. Life Insurance Corporation of India AIR 1962 Supreme Court 814.
17. Now we have to find out whether the facts suppressed by Madan Gopal are of material nature or not. Pleural Effusion has been defined in the medical dictionary as under:-
"Pleural effusion It is an extra collection of fluid between two layers of pleura. It may be caused by pneumonia, heart failure, cancer and tuberculosis. Extra fluid causes compression of lung tissue. It may affect one or both lungs. Excess fluid can be drained out and suitable medical treatment may be given. Pleurisy is the inflammation of pleural membrane. It is caused by lung infection. It causes a sharp chest pain. This pain may be referred to tip of shoulder. Treatment is of underlying cause."
18. The definition of disease clearly proves that it was a serious disease, the concealment of which amounts to suppression of material facts. The Hon'ble Supreme Court of India in the latest judgment reported as Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., 2009 CTJ 956 (Supreme Court) (CP) has held as under:-
"17. The terms "material fact" is not defined in the Act and, therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of First Appeal No.1192 of 2004 5 Insurance and has a bearing on the risk involved would be "material'.
19. In view of the discussion above, it is clearly proved that life assured had suppressed the material fact of the pleural effusion while filling the proposal form on 28.5.2000, which amounted to breach of good faith. Therefore, the respondent insurance was duly entitled to repudiate the claim.
20. This appeal is accordingly accepted and impugned order dated 20.8.2004 is set aside.
21. The appellants had deposited an amount of Rs.25000/- at the time of filing of the appeal in this Commission. This amount of Rs.25000/- along with interest accrued, if any, be remitted to the appellants by way of crossed cheque / bank draft.
22. The arguments in this appeal were heard on 23.2.2010 and the orders were reserved. Now the order be communicated to the parties.
21. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Justice S.N.Aggarwal) President (Mrs.Amarpreet Sharma) Member March 02, 2010.
Davinder