National Consumer Disputes Redressal
Lic Of India vs Smt.Premlata Aggarwal on 12 October, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.2641 OF 2007 (From the order dated 23.02.07 in Appeal No.755/99 of the State Commission, Rajasthan) LIC of India Petitioner Versus Smt.Premlata Aggarwal Respondent BEFORE : HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioner : Mr.Mohinder Singh, Advocate For the Respondent : Mr.Rajesh Kapoor, Advocate Pronounced on 12th October, 2011 ORDER
PER MRS.VINEETA RAI, MEMBER Life Insurance Corporation of India (hereinafter referred to as the Petitioner) has filed the present revision petition being aggrieved by the order of the State Commission in Appeal No.755/99 wherein Smt.Premlata Aggarwal was the Respondent.
The facts of the case are that the Respondents son (hereinafter referred to as the insuree) had taken an insurance policy with accident benefit for a sum of Rs.1 lakh on 31.01.1994 and had deposited the required premium for the same.
On 30.08.1994 the insuree died and the Respondent being a nominee filed a claim with the Petitioner/Insurance Company. The claim of the Respondent was repudiated by the Petitioner/Insurance Company on the grounds that the insuree had suppressed material information pertaining to his ailments and hospital treatment prior to his taking the insurance policy.
According to the Respondent except for inflation in the lungs for which the insuree had undergone an operation 10 years ago and which was an ordinary disease, he did not suffer from any other ailments including T.B. and, therefore, the claim was wrongly repudiated specially since there was no nexus between his illness 10 years ago and his death. Respondent, therefore, filed a complaint before the District Forum on grounds of deficiency in service requesting that Petitioner/Insurance be directed to pay the Respondent Rs.1 lakhs towards insurance claim, Rs.20,000/- as compensation for mental agony and Rs.25,000/- for economic loss along with litigation cost of Rs.1,100/-.
Petitioner on the other hand stated that the claim of the Respondent was rightly repudiated because in the insurance proposal form, the insuree had given incorrect answers by stating that he had not been to any hospital for any medical check-up nor was he suffering from any ailment pertaining to heart, lungs, kidney etc., that he never consumed alcohol and that his general state of health was good. On the other hand, on the basis of available records including from the hospital it came to light following an investigation by the Petitioner that all these facts were incorrect because apart from suffering from T.B. and pleural inflation, he was also addicted to consuming alcohol and further he was admitted to hospital from 27.07.1993 to 31.07.1993 and then again on 30.08.1994 i.e. prior to his having taken the insurance policy on 31.01.1994. Since an insurance policy is a contract entered in utmost good faith between the two parties, by suppressing this material information pertaining to his health, the insuree violated this contract and therefore, the claim of the Respondent was rightly repudiated.
The District Forum after hearing both parties allowed the complaint on the grounds that the operation for inflation of the lungs had been carried out 10 years ago whereas the insuree was only expected to divulge information about diseases which affected him in the last 5 years. Also while it is a fact that insuree was admitted in the hospital, it was for less than 7 days and there was no affidavit of any doctor or witness that he was suffering from various diseases including being an alcoholic etc. Therefore, the claim was wrongly repudiated. The District Forum directed the Petitioner/Insurance Company to pay a sum of Rs.1 lakh with interest @ 15% per annum from the date of instituting the complaint i.e. 23.12.1996 till the date of payment and Rs.1,000/- as litigation cost.
Aggrieved by this order, the Petitioner filed an appeal before the State Commission. The State Commission also concluded that there was no credible evidence to establish that the insuree had suppressed any material information pertaining to his ailments or that he was an alcoholic. Further, since the operation for inflation of lungs was carried out 10 years back, it would not be adequate reason for the insurance company to repudiate the claim.
It, therefore, upheld the order of the District forum regarding deficiency in service but reduced the rate of interest from 15% to 9% per annum.
Hence, the present revision petition.
Counsel for both parties made oral submissions.
Counsel for Petitioner stated that learned Fora below erroneously concluded that the insuree had not suppressed any material information regarding his illness by not taking note of the bed-head ticket produced in evidence before the Fora below by the Respondent herself from the Jawahar Lal Nehru Hospital, Ajmer wherein it was clearly stated that the insuree was suffering from various diseases including T.B., psoriasis of liver and he was also an alcoholic. At the time of his admission prior to his death, he had severe vomiting mixed with blood. Counsel for Petitioner further stated that since the insuree died within 7-8 months after taking the policy i.e. within a period of two years, the onus to prove that he was not suffering from any pre-existing diseases was on the Respondent which she had failed to do. On the other hand, since the bed-head ticket as stated above, clearly indicated that the insuree had prior to his having taken the insurance policy been suffering from various ailments pertaining to his lungs and his liver and since this document was produced by the Respondent herself, the observation of the Fora below that these diseases were not proved by the Petitioner through affidavit of doctors/witnesses etc. are not tenable.
Counsel for Respondent on the other hand, stated that the Fora below on the basis of evidence produced before it rightly concluded that except for an operation prior to taking of insurance policy, there was no proof backed by affidavits that the insuree had suppressed material information regarding pre-existing illness and, therefore, the present revision petitioner has no merit and needs to be dismissed.
We have heard the learned counsel for both parties and have carefully considered the evidence on record.
The facts pertaining to the insurance policy taken by the Respondents late son, his death within two years of taking the policy and his illness and operation for inflated lungs 10 years ago are not in dispute. It is also a fact that as per the bed-head ticket of Jawahar Lal Nehru Hospital, Ajmer, duly signed by a doctor which was produced before the Fora below by the Respondent, the insuree had been treated for various diseases which included T.B., pleural effusion etc. We agree that the Fora below erred in not appreciating the fact that this important and critical piece of evidence was produced by the Respondent herself and, therefore, no affidavit was required to prove this document. A perusal of this document clearly indicates that the insuree had been admitted in the hospital from 27.07.1993 to 31.07.1993 i.e. prior to his taking the insurance policy and again he had to be re-admitted on 30.08.1994 with a history of various serious ailments pertaining to his liver, lungs etc. It is also a fact that in response to specific queries pertaining to his medical treatment and general state of health, the insuree had stated that he had not undertaken any medical treatment, that he was not suffering from any disease pertaining to his heart, lungs and kidney, that he was never admitted to any nursing home/hospital, that had never taken alcohol and that his general state of health was good. All these replies were incorrect since the Respondent herself had produced evidence which indicated that he had been suffering from various diseases, that he was an alcoholic and that he was under medical treatment prior to his having taken the insurance policy. This clearly indicates that the insuree had suppressed material information and therefore, he violated the well-established and fundamental principle of an insurance policy which is a contract entered into utmost good faith and binding on both parties. As per the terms and conditions of the insurance policy, in such cases, repudiation of an insurance claim is justified. In view of the above facts, the Respondents contention that none of these issues are relevant is unacceptable and not maintainable. The Fora below erred in not appreciating these important facts in the correct perspective and on the basis of credible evidence on record. We, therefore, have no option but to set aside the orders of the Fora below and allow the revision petition with no order as to costs. The complaint is ordered to be dismissed.
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(ASHOK BHAN J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/