National Consumer Disputes Redressal
Smt. Santosh Kanwar vs Life Insurance Corporation Of India on 9 September, 2008
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.2049 OF 2000 (from the order dated 19.6.2000 in Appeal No.1667/98 of the State Commission, Jaipur, Rajasthan) Smt. Santosh Kanwar W/o Late Shri Kailash Chandra Dashora R/o Mahatama Gandhi Colony, Opp. Party. Police Station, Jhalrapatan, Distt. Jhalawar, Rajasthan Petitioner Versus Life Insurance Corporation of India Through the Sr. Divisional Manager Divisional Office, Bhawani Singh Road, Jaipur, Rajasthan Respondent BEFORE : HONBLE MR.JUSTICE M.B. SHAH, PRESIDENT HONBLE MRS. RAJYALAKSHMI RAO, MEMBER HONBLE MR. S.K. NAIK, MEMBER For the Petitioner : Ms. Shobha, Advocate For the Respondents : Mr. Ashok Kashyap, Advocate 09.09.2008 ORDER
Being aggrieved and dissatisfied by the judgement and order dated 19.6.2000 passed by the State Consumer Disputes Redressal Commission, Rajasthan in Appeal No.1667/98, the insured (complainant) has preferred this Revision Petition.
It is the contention of the complainant that her husband, Shri Kailash Chandra Dashora, was working as a teacher with the State Nehru Secondary School, Jhalawar and had taken an insurance policy under the Salary Saving Scheme on 15.12.1993 for a sum of Rs.50,000/-. The insurance premium was being paid by the employer of the insured.
It is pointed out that her husband fell sick on 16.6.1995 and was treated for fever from 16.6.1995 to 10.7.1995 by Dr. Sushma Pandey at Jhalawar. He was thereafter referred to Medical College, Udaipur where it was diagnosed that he was suffering from liver tumor (Left Lobe Liver Tumor) and was given treatment from 11.7.1995 to 7.8.1995 in the said hospital. Thereafter, he was taken to Tata Memorial Hospital, Mumbai from 11.8.1995 to 17.8.1995 and, subsequently, he died on 29.8.1995.
Claim was submitted before the Life Insurance Corporation of India (hereinafter referred to as the LIC for short) but the same was repudiated by letter dated 13.11.1997 wherein reason for repudiation of the claim was as under :-
In this connection we have to inform you that in the proposal/personal statement for assurance signed by the deceased assured on 11.12.1993, he had answered the following questions as under noted:-
Questions a.
Whether you have ever consulted to any doctor in last five years in regard to some ailment which required treatment for more than a week? No b.
Whether you have been on leave on ground of sickness in last five years? No c.
Whether you have been suffered from a decease related to stomach, heart, lever, brain and nerves or whether you are suffering now? No d.
How is you health normally?
Normal We may, however, state that all these answers were false as we hold in disputable proof to show, before he proposed for above policy he had suffered from Myalgia, URI APD, Br. Dysp. Lsc, Urticaria, Neuritis, Amaenia, Pyrexia, Amoebic Colitis for which he had consulted a medical man and had taken treatment from him/in a Hospital and was also on medical leave for 3 days and 12 days from 20.8.90 to 22.8.90 and 7.12.90 to 18.12.90, and had also drawn medical reimbursement for the above diseases. He did not however, disclose these facts in his Proposal/Personal Statement.
Instead he gave false answers therein as stated above.
Hence, the complainant approached the District Forum, Jhalawar by filing Complaint No.35/1998. The District Forum, by its judgement and order dated 12.8.1998, allowed the complaint and directed the LIC to pay the sum assured with interest @ 18% per annum and Rs.5,000/- towards compensation and Rs.500/- as costs.
Against that judgement, LIC preferred an appeal before the State Commission, Rajasthan. The State Commission, by its judgement and order 19.6.2000, allowed the appeal on the ground that the assured knowingly suppressed the factum of the state of his health while making the proposal for obtaining the policy in question, jointly with his wife. No doubt, the State Commission recorded that, considering the facts, even the LIC had offered to pay Rs.25,000/- as ex gracia to the complainant.
That order is challenged by filing this Revision Petition.
Learned counsel for the petitioner submitted that the impugned order passed by the State Commission is, on the face of it, erroneous and without considering the implication of Section 45 of the Insurance Act, 1938 as well as Regulations framed by the Insurance Regulatory and Development Authority (hereinafter referred to as the IRDA for short) in 2002.
She submits that those Regulations may not be applicable but, at the same time, the principles laid down thereunder are general principles applicable to all insurance policies since years. She further submitted that on this exact point there is a decision of the Bombay High Court in the case of Smt . Dipashri Vs. Life Insurance Corporation of India and others [AIR 1985 BOMBAY 192]. She further submitted that suppression must be of a material fact.
She heavily relied upon the decision of the Apex Court in the case Life Insurance Corporation of India and others Vs. Smt. Asha Goel and another (2001) 2 SCC 160. She submitted that there is no suppression of material fact because the death took place not by simple fever which any person might have undergone occasionally but it has taken place because of liver tumor (left lobe liver tumor) which was not noticed even by Dr. Sushma Pandey who treated the insured for roughly a month at Jhalawar. It was only noticed at the Medical College Hospital, Udaipur on 11.7.1995. Finally, learned counsel, Ms.Shobha, relied upon the decision in the case of P.C. Chacko & Another Vs.Chairman LIC of India & Ors. (2008) 1 SCC 321.
As against this, learned counsel for the LIC has referred to the leave taken by the insured for medical treatment and submitted that the order passed by the State Commission does not call for any interference. He further submitted that the insured knew about various ailments suffered by him but has not revealed it in the proposal form and, therefore, the claim was rightly repudiated.
FINDINGS :
For deciding the matter, we would first refer to the law laid down by the Apex Court in P.C. Chacko Vs. LIC (supra).
In that case, it was an admitted position that the insured had undergone an operation for adenoma thyroid. Despite this, he did not disclose the said fact in the proposal form and stated that his health was good and he had not remained absent from his place of work on the ground of health during the last 5 years. In that case, the High Court dismissed the Suit on the ground of suppression of fact. That judgement of the High Court was challenged before the Supreme Court.
After taking into consideration the basic undisputed fact that the insured had undergone an operation for adenoma thyroid, which was a major surgery, the Court dismissed the Appeal.
However, on law on the issue, after quoting Section 45 of the Insurance Act, 1938, the Court held as under :
Section 45 postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia, on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy-holder or that the policy-holder knew at the time of making it that the statement was false. Statute, therefore, itself provides for the limitation for valid repudiation of an insurance policy. It takes into account the social security aspect of the matter.
There are three conditions for application of second part of Section 45 of the Insurance Act which are :
(a) the statement must be on a material matter or must suppress facts which it was material to disclose;
(b) the suppression must be fraudulently made by the policy-holder; and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
The insureds brother was an agent of Life Insurance Corporation of India. It was he, who had asked the insured to take the insurance policy. He, being an authorized agent of Life Insurance Corporation, presumably knew the effect of misstatement of facts. Misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature.
The insured furthermore was aware of the consequence of making a misstatement of fact. If a person makes a wrong statement with knowledge of consequence thereof, he would ordinarily be estopped from pleading that even if such a fact had been disclosed, it would not have made any material change.
From the aforesaid enunciation of the law, it is clear that
(a) within a period of two years from the date of effecting of the policy, the insurance policy can be repudiated on the ground of suppression of material fact and the statute itself provides for limitation of valid repudiation of the insurance policy;
(b) suppression must be on a material matter or must suppress such a fact which was material to be disclosed;
(c) suppression must be fraudulently made by the policy-holder; and
(d) he must be knowing that the suppressed fact was material and it was required to be disclosed for taking the insurance policy. If this is not there, then on the ground of material suppression of fact, the policy cannot be repudiated.
The Court pertinently observed that misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature.
Keeping the aforesaid law in mind, the controversy is required to be decided. In the present case, the insured deceased was not suffering from any serious disease at the time of filling up the proposal form for obtaining the insurance policy.
There was no material suppression on his part.
Again, on the same point, we would refer to another decision of the Apex Court in the case of Life Insurance Corporation and others Vs. Smt. Asha Goel and another (supra), wherein after interpreting Section 45, the Court held as under:-
Coming to the question of scope of repudiation of claim of the insured or nominee by the Corporation, the provisions of Section 45 of the Insurance Act is of relevance in the matter. The section provides, inter alia, that 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 false, unless the insurer shows that such statement 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 or that it suppressed facts which it was material to disclose. The proviso which deals with proof of age of the insured is not relevant for the purpose of the present proceeding. On a fair reading of the section it is clear that it is restrictive in nature. It lays down three conditions for applicability of the second part of the section namely :
(a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Mere inaccuracy or falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues fight up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any misstatements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.
To the same effect, there is the judgement of the Apex Court in Mithoolal Nayak Vs. LIC of India (AIR 1962 SC 814), which is heavily relied upon by Ms.Shobha, learned counsel for the petitioner, in which the position of law was stated thus :
"The three conditions for the application of the second part of Section 45 are :
(a) the statement must be on a material matter or must suppress facts which it was material to disclose,
(b) the suppression must be fraudulently made by the policy-holder and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
Where the policy-holder, who had been treated, a few months before he submitted a proposal for the insurance of his life with the insurance company by a physician of repute for certain serious ailments as anaemia, shortness of breath and asthma, not only failed to disclose in his answers to the questions put to him by the insurance company that he suffered from those ailments but he made a false statement to the effect that he had not been treated by any doctor for any such serious ailment :
Held (i) that, judged by the standard laid down in Section 17, Contract Act, the policy-holder was clearly guilty of a fraudulent suppression of material facts when he made his statements, which he must have known were deliberately false and hence, the policy issued to him relying on those statements was vitiated.
(ii) The principle underlying the Explanation to Section 19 of the Contract Act is that a false representation, whether fraudulent or innocent, is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract.
That principle did not apply in the instant case. The terms of the policy made it clear that the averments made as to the state of health of the insured in the proposal form and the personal statement were the basis of the contract between the parties and the circumstance that the policy-holder had taken pains to falsify or conceal that he had been treated for a serious ailment by a physician only a few months before the policy was taken showed that the falsification or concealment had an important bearing in obtaining the other party's consent. A man who has so acted cannot afterwards turn round and say, 'it could have made no difference if you had known the truth'. In the circumstances no advantage could be taken of the Explanation to Section 19 of the Contract Act."
To avoid such repeated contentions and to protect the consumer, this Commission, in the case of Asha Garg V/s. United Insurance Company Ltd. (Original Petition No.164/2001 decided on 24.11.2005) also held as under:-
Learned Counsel for the Complainants submitted that the law in England is different and there were no changes despite the various suggestions as the terms of the insurance proposal form and the insurance policy were unfair and harsh. He, therefore, contended that the judgments of the Courts in England cited by the learned Counsel for the Insurance Company would have no bearing in India because of specific provisions in view of Sec.19 of the Contract Act and Sec. 45 of the Insurance Act.
Repudiation of the claim by the insurance company on the alleged ground of suppression of material facts, even in the Courts in England, was commented severely. This is stated in Modern Insurance Law, 4th Edn., of John Birds, wherein the author has commented and observed that the law regarding the disclosure of material facts was operating harshly in the U.K. because the insured did not realise that the particular facts were in law material.
The relevant discussion is as under :
Suggested Reforms in Insurance Contracts in the U.K.:
Practice in And Reform Of Non-Disclosure And Misrepresentation The point that law is capable of operating harshly regarding the disclosure of material facts in particular has already been made earlier in this chapter. Indeed it has been often been said that a proposer for insurance may act with perfect good faith and yet not satisfy the duty of disclosure which the law requires because he did not realise that particular facts were in law material, or did not realise that he had to do any more than truthfully complete the answers to questions on a proposal form. It could be argued that there is no real need for a duty of disclosure in modern conditions other than one requiring the insured to answer honestly questions expressly put to him.
Until fairly recently it seemed as though the law would be reformed in this respect. This was because recommendations for reform have been made by both the Law Reform Committee on 1957 and by the Law Commission in 1980. The important and carefully considered recommendations of the Law Commission, which in practice would probably have meant the withering away of a pure duty of disclosure, were accepted by the government, but were strongly opposed by the insurance industry particularly in respect of their application to business insurance. The unfortunate result of this has been that actual legal reform seems unlikely at present. Instead, the government has accepted reform by way of self-regulation by the insurers themselves. For this reason, it is felt that detailed description of the Law Commissions proposals would be inappropriate in a book of this size.
Statements of insurance practice As has been noted earlier, this self-regulation take the form of declaratory Statements of Insurance Practice. In so far as they do, in practice, provide a measure of protection for the individual insured, they are obviously to be welcomed. In addition, we must note the influence of the Insurance Ombudsman in this area, as discussed below. Unfortunately, one cannot be certain that the statements are universally complied with because those insurers who are not members of the Association of British Insurers of Lloyds are not party to them, although they are expected to comply. A brief review of their terms is necessary.
The revised Statements issued in 1986 reflect the Law Commissions recommendations. As far as non-disclosure and misrepresentation are concerned, their effect is that insurers undertake not to rely on an innocent breach by the insured. By paragraph 2(b) of the Statement of General Insurance Practice, An insurer will not repudiate liability to indemnify a policy-holder:
(i) on grounds of non-disclosure of a material fact which a policy-holder could not reasonably be expected to have disclosed;
(ii) on grounds of misrepresentation unless it is a deliberate or negligent misrepresentation of material fact.
Under the heading of consumer protection, the learned Author has observed thus:
Consumer Protection:
Judges have on occasion railed against insurers for not producing their policies in a form intelligible to the ordinary consumer, and consumer representatives and bodies, including the Director General of Fair Trading and the Insurance Ombudsman, have frequently made the same point. The Law Commission clearly intended that conditions and exceptions in insurance contracts should be brought within the ambit of what became the Unfair Contract Terms Act, 1977, but pressure from the insurance industry secured their exclusion from that Act in return for their agreeing to promulgate the Statements of Insurance Practice. However, many insurers did respond to criticism in particular by rewording their policies in plain English.
This is clearly to be welcomed, although this does not necessarily mean that the average consumer will still read and understand their insurance policies nor, as we have seen, does it necessarily mean that problems of interpretation will not arise.
..
More recently there has been an even more important development, more important because it is not dependent on a self-regulatory structure. This is the introduction of the Unfair Terms in Consumer Contracts Regulations to which reference has already been made. It needed E.C. legislation to produce this measure of consumer protection. Some consideration has already been given to these Regulations. In the context of this chapter, there are three points which need to be made. The first is the general requirement to use plain, intelligible language. This reinforces the trend toward plain English already noted. The second is that the Director General of Fair Trading is under a statutory duty to monitor the use of unfair term and can seek undertakings or court injunctions to prevent their use. The third point is the most important one for present purposes and concerns the question of the application of the core part of the Regulations to the question of the cover provided by an insurance contract.
The core part strikes down any unfair term which contrary to the requirement of good faith causes a significant imbalance in the parties rights and obligations under the contact to the detriment of the consumer. However, it does not apply to any terms which defines the main subject matter of the contract. It is thought that the provisions concerning the risks covered and excepted under an insurance contract must be within this exception, as these do define the main subject matter of the contract. This, it is suggested, is also a sensible interpretation. In the result, it is thought that the impact of the Regulations on the matters under consideration here is limited to the requirement of plain and intelligible language, supported by a statutory reinforcement of the contract proferentem rule.
Insurance Regulatory and Development Authority ( Protection of Policy-Holders Interests) Regulations 2002 Fortunately, in India, we are having the Insurance Regulatory and Development Authority (Protection of Policy-Holders Interests) Regulations 2002. It appears that at the relevant time, the insurance companies were nationalized and there was no pressure on the Government not to frame such Regulations.
Hence, the question is whether in this case there is suppression of material fact on the part of the insured at the time of taking policy?
For finding out whether the alleged suppression in the proposal form by the insured is on material fact, we would refer to the analysis made by the District Forum for the alleged medical treatment taken by the insured. The relevant portion thereof is as under:-
Month of Treatment Name of disease December 1990 (7.12.90 to 15.12.90) U.R.I. [ U.R.I.- Upper Respiratory Infection - An imprecise term for any kind of infectious disease involving nasal passage, pharynx and bronchi.] January 1992 (11.1.92 to illegible) Myalgia [ Myalgia -
Tenderness or pain in muscles or muscular rheumatism.] November 1992 (6.11.92 to 11.11.92) U.R.I. February 1993 (2.2.93 to illegible) U.R.I. June 1993, November 1993 (4.11.93 to 11.11.93) L.S.C. December 1993 (29.11.93 to 2.12.93) Urticaria [ Urticaria - A vascular reaction of the skin characterized by the eruption of pale evanescent wheals, which are associated with severe itching.] Subsequent to the policy cover:
March 1994 (15.12.94 to 12.3.94) Neuritis [ Neurtis - Inflammatioin of a nerve or nerves, usually associated with a degenerative process.] September 1994 (5.9.94 to 8.9.94) Br. Stomatitis August 1993 (13.8.93 to 20.8.93) B.R. Dysp.
[ Br. Dysp. -
Imperfect painful digestion. Not a disease in itself but symptomatic of other diseases of disorders. Characterized by vague abdominal discomfort, a sense of fullness after eating, eructation, heartburn, nausea and vomiting and loss of appetite.] June 1994 (27.6.94 to 30.6.94) Illegible November 1994 (25.11.94 to 1.12.94) Anemia [ Anemia :
(Aneamia) -
Reduction in red blood cells - Anemia is not a disease. It is symptom of disease.] January 1995 (11.1.95 to 20.1.95) A.P.D. March 1995 (15.3.95 to 22.3.95) Pyrexia [ Pyrexia - A condition in which the temperature is about normal. It is like fever.] March 1995 (23.3.95 to 28.3.95) Illegible May 1995 (16.5.95 to 30.5.95) -do-
July 1995 (24.7.95 to 9.8.95) Pain at upper R.N.T. Hospital Udaipur abdomen September, 1995 Amebic liver R.N.T. Hospital Udaipur Abesis August, 1995 Left lobe liver Tata Memorial Hospital, Bombay tumor [Amebic : (Not amoebic) - It pertains to amebae or it is caused by amebae.] [Ameba - Agenus of protozoa found in soil and water. It is also found as parasitic in man.] [Colitis - Inflammation of colon. Colon-The large intesting from the end of ilium to the rectum.] Note:
The above description of diseases are based on Tabers Cyclopeida Medical Dictionary edition of 1993 Vol.I &II.
Thereafter, the District Forum observed that the treatment which was taken by the complainant was for trivial ailments. We entirely agree with the findings recorded by the District Forum. Fever for some days, pain in abdomen, treatment for URI affecting the nasal passage or bronchitis at the relevant time, tenderness or pain muscles (in 1992), again URI in November, 1992 and February, 1993 or eruption some pimples on the skin in November, 1993 cannot be said to be serious ailments which are required to be noted at the time of taking the insurance cover. Admittedly, the insurance cover was taken under the salary saving scheme on 15.12.1993. Subsequent treatment would have no bearing in deciding this matter.
Dealing with similar facts, the Bombay High Court observed in the case of Dipashri (supra) that the insured has taken leave on various occasions by stating that he was suffering from pain on account of Piles, Hyhypertension, Influenza Dysentery, Influenza, Fever, Diarrhoea, Sprain in leg and Fever. The Court held that non-disclosure of such ailment would hardly be a ground for repudiating the claim. After discussing the Apex Courts judgement in the case Mithoolal Nayak (supra), the Bombay High Court finally held that:
The action of the Corporation in concluding from that certificate that the deceased was suffering from serious ailments or illness \and thereby repudiating the contract is wholly illegal. The Corporation has raised false bogie of inaccurate statements only to defeat the just claim of the poor widow and the action of the Corporation deserves to be deplored.
In the first instance, there was no suppression whatsoever by the deceased. It was not necessary for the deceased to disclose trivial ailments like fever, flue or dysentery.
In the judgement, the non-disclosure of the fact that the deceased was suffering from fever or down with flue on some occasions is not material matter and, therefore, the failure to disclose the same cannot be construed as suppression of the relevant fact. As laid down by the Supreme Court, it is not suppression of the fact which is sufficient to attract second para of S.45 of the Insurance Act but what is required is that such suppression should be fraudulently made by the policy-holder. The expression fraudulently connotes deliberate and intentional falsehood or suppression and some strong material is required before concluding that the policy-holder had played a fraud on the Corporation.
In our view, the aforesaid observation would equally apply to the facts of the present case.
Undisputedly, the insured deceased, who was a teacher, died on 29.8.1995 due to left lobe of liver tumor, which was not noticed even by the doctor at Jhalawar where the deceased took first treatment. This fact was only clearly noticed by the Tata Memorial Hospital, Mumbai after 11.8.1995. Certainly, it is to be highlighted and noted that for the alleged suffering, the employees of the Government or Semi-government bodies take medical leave for various purposes but that should not be made a ground for repudiation of the claim unless the suppression of the disease or ailment is material and that the insurance company arrives at a conclusion that it would not have granted insurance cover if the said facts were disclosed or would have taken larger premium.
Apart from this fact, learned counsel Ms. Shobha contended that the ailment referred to by the Insurance Company has no connection with the death of the insured. Death was because of liver tumor and not because of the pain or fever for which the insured has taken leave from the school.
In our view, in the facts of the present case, this submission is required to be accepted.
As against this, learned counsel for the Insurance Company relied upon the decision of this Commission wherein it has been held that the cause of death has no relevance with regard to the answer given by the insured at the time of submitting the proposal form. He referred the cases, i.e., R.P. No.3362/2001 [LIC V/s. Smt. Ayesha] decided on 25.10.2005, R.P. No. 1935/1999 [LIC V/s. Krishan Chander Sharma] decided on 23.1.2006 and R.P. No.2183/2004 [Subodh Chandra Shivlal Shah V/s. Bhartiya Jeewan Bima Nigam] decided on 29.3.2006.
In our view, the aforesaid judgements are solely based upon facts of each case, particularly where the ailments suffered by the insured were serious.
There is nothing on record to show that the insured was required to take treatment for more than a week. No doubt, with regard to the question whether the insured has been on leave on the ground of sickness in last five years, the answer given by him was incorrect. With regard to the question whether insured had suffered from a disease relating to stomach, heart, liver, lungs, brain and nerves and whether he was suffering at the relevant time, the answer was no. Hence, it cannot be said that the insured was suffering from such diseases. As such, he attended the school continuously as a teacher.
The learned counsel for the petitioner rightly referred to the decision of this Commission in the case of LIC of India Vs. Smt. Shobhadevi Sunder Lal Patni (in First Appeals Nos.421 of 1993 and 391 of 1994) decided on 26.4.1996, wherein five Members of this Commission have held that :
The histopathlogy report indicates fat in the liver and mild pulmonary hemorrhage and oedema in the lung, again not directly related to schizophrenia. There is no history of these two ailments, in respect of the deceased, in the record produced by the LIC. We are, therefore, of the opinion that it was indeed a callousness on the part of the LIC to have put the widow of the deceased to a considerable inconvenience and mental agony by not settling the claim in time: in fact, repudiating it on the ground which is totally untenable.
The aforesaid observation is equally applicable to the facts of the present case and the repudiation of the claim has caused serious prejudice to the widow of a teacher for years together.
In this view of the matter, impugned order passed by the State Commission is set aside. The complaint is allowed. The order passed by the District Forum is maintained. However, the order passed by the District Forum directing the insurance company to pay interest at the rate of 18% is modified and the insurance company is directed to pay the insured amount of Rs.50,000/- with interest at the rate of 10% per annum from 1.3.1996 (i.e. after a period of 6 months from the death of the insured) with cost of litigation quantified at Rs.5,000/-.
Revision Petition stands disposed of accordingly.
We highly appreciate the hard work done by both, Ms.Shobha, Advocate for the petitioner and Mr.Ashok Kashyap, Advocate for the insurance company.
Sd/xxx J. (M.B. SHAH) PRESIDENT Sd/xxx (RAJYALAKSHMI RAO) MEMBER Sd/xxx (S.K. NAIK) MEMBER /sra/