A.CHANDRAKANTHA vs Life Insurance Corporation of India

THE appellants in this appeal were the complainants in CD No. 61/1996 before the Warangal District Forum and the opposite parties in that CD are the respondents in this appeal. THE 1st appellant is the widow of the deceased Sri A. Krishna Prasad and the 2nd and 3rd appellants are their son and daughter repsectively. Sri A. Krishna Prasad took a Jeevan Mitra policy for Rs. 50,000/- which commenced on 15.7.1991 for a term of fifteen years. His proposal in respect of that policy was dated 21.6.1991. He suffered a fall on 2.7.1992 and received a serious head injury. He was hospitalised and later died on 21.7.1992. He had taken two other policies with the 1st respondent i.e. Life Insurance Corporation of India, and the complainants were paid the amounts due under those two policies. In respect of the Jeevan Mitra policy in question the complainants filed their claim statement on 21.11.1994. THE respondents repudiated their claim by letter dated 30.9.1995 stating that the insured A. Krishna Prasad gave wrong answers in the negative for the following questions : "11(a) During the last five years did you consult a medical practitioner for any ailment requiring treatment for more than a week ? (c) Have you remained absent from place of work on grounds of health during the last 5 years ? (d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system ?

IT was further stated in that letter of repudiation as follows : "We may, however, state that all these answers were false as we hold indisputable proof to show that about one month before he proposed for the above policy he had suffered from infective hepatitis for which he had consulted a medical man and had taken treatment from him and was on medical leave for 20 days from 23.4.1991 to 12.5.1991, 12 days from 13.5.1991 to 24.5.1991 and 13 days from 26.6.1990 to 8.7.1990. He did not, however, disclose these facts in his proposal. Instead, he gave false answers therein as stated above. IT is therefore evident that he had made deliberate mis-statements and withheld material information from us regarding his health at the time of effecting the assurance and hence in terms of the Policy Contract and the Declarations contained in the forms of Proposal for Assurance and Personal Statement, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belong to us."

Aggrieved by that repudiation the appellants approached the Warangal District Forum by their complaint numbered as CD. No. 61 /1996. In support of their case the respondents filed copy of the proposal dated 21.6.1991. Under column 11 relating to the personal history, the insured answered in the negative in respect of all querries (a) to (h) and against (i) - What has been your usual state of health ? - he answered "good". The respondents also filed letter dated 27.3.1995 from the Asstt. Accounts Officer, E.R.O., Cherial giving information about the record of absence of Sri A. Krishna Prasad during the period from 12.12.1988 to 21.7.1992. The respondents also filed leave applications of the complainant for 20 days from 23.4.1991 to 12.5.1991 on medical grounds and certificate issued by Dr. G. Madhusudan Reddy, M.B.B.S., dated 23.4.1991 stating as follows : "I, Dr. G. Madhusudan Reddy, after careful personal examination of the case hereby certify that Sri A. Krishna Prasad, L.D.C. whose signature is given above, is suffering from Infective Hepatitis (jaundice) with Fever and I consider that a period of absence from duty of 20 days with effect from 23.4.1991 to 12.5.1991 is absolutely necessary for the restoration of his health."

That the deceased suffered from infective hepatitis was not seriously disputed in the complaint filed by the appellants before the District Forum. However they contended as follows : "In the said letter (dated 30.9.1995) the contention of the Corporation is that though 2 years prior to the medical examination on 21.6.1991, the assured was effected with infective hepatitis (Gandies) and was on medical leave for about 20 days in the year 1990-91. He has not disclosed this fact in the medical examination questionnaire at the time of the proposal for the assurance. 9. The deceased did not die of infective hepatitis. 10. The disease of infective hepatitis is not a fatal one and it is only an infection most commonly prevalent in these parts of the country and not at all a serious disease and the same has no relevance with the death of the deceased as the deceased died due to the head injury and the neurogical disease due to the injury on an accidental fall. Till the date of the accidental fall the deceased was of sound health."

ON the other hand in the counter filed on behalf of the opposite parties it was contended as follows : "According to the policy contract the proposer is bound to disclose all the material facts within his knowledge and fill in the proposal form for issuing the policy. But while filling the proposal form for issue of policy No. 680325090 the proposer had withheld the material particulars of his sick leave and induced the opposite party to issue policy on his life for wrongful gains. The deceased life assured availed sick leave for having suffered with Jaundice from 23.4.1991 to 12.5.1991 (for 20 days). And the proposal for the policy No. 680325090 is submitted on21.6.1991 wherein the facts of his health i.e. having suffered with Jaundice, were suppressed by the proposer. There is six months waiting period for Jaundice after complete cure so as to entertain the proposal and to take a decision whether to accept it and issue a policy or not while calling for special reports like SGOT, Serum Bilrubinu etc... Hence the proposer has also not disclosed information regarding his past health to the Medical Examiner as a result of which further medical check up and reports could not be called for."

The District Forum, after considering all aspects of the matter held that the repudiation by the respondents was made on sufficient grounds by applying their mind and that therefore there was no deficiency in service on the part of the respondents and in that view of the matter dismissed the complaint.

THE learned Counsel for the appellants relied on the decisions of the National Commission in Life Insurance Corporation of India v. Sanjeev Mahendralal Shah, I (1998) CPJ 45 (NC)=1996 (1) CPR 129 (NC), and Smt. Alia Begum v. L.I.C. of India, III (1997) CPJ 106 (NC)=1997 (3) CPR 60 (NC), and contended that the non-disclosure by Sri A. Krishna Prasad that he suffered from infective hepatitis or jaundice did not amount to suppression of material facts and that therefore the repudiation by the respondents was bad and amounted to deficiency in service. We do not find any merit in this contention. In Sanjeev v. Mahendralal Shah''s case (supra) the National Commission held that the LIC failed to prove that the insured had any knowledge that she was suffering from cancer and that the LIC had not produced any evidence on record to show that the assured consulted any medical practitioner for any ailment. In that context the National Commission held as follows : "It is not that the assured is required to disclose casual ailments not requiring any treatment or consultation with a medical doctor. THE sickness, ailment which is required to be disclosed with reference to serious disorders in health." (Emphasis supplied) In the present case it cannot be contended that infective hepatitis affecting liver and causing jaundice is not a serious ailment requiring attention of a medical doctor. In Smt. Alia Begum''s case (supra), the National Commission laid down the test for determining materiality of the facts to be disclosed. THE National Commission held as follows : "In order to discharge its onus, it was for the Insurance Company to place material on the record to show that the deceased suppressed facts which it was material to disclose. Whether a fact is material depends upon the circumstances of a particular case. THE test to determine materiality is whether the fact has any bearing on the risk undertaken by the insurer. If the fact has any bearing on the risk, it is a material fact; if not, it is immaterial."

The National Commission further observed that non-disclosure of trivial ailments would not amount to suppression of material facts. In United India Insurance Co. Ltd. v. Biman Krishna Bose, II (1995) CPJ 62 (NC), the National Commission held that suppression of the fact that the insured was suffering from hypertension in the proposal submitted by the insured was fatal because there was nothing to show that the hypertension with which the insured was suffering was temporary or casual. The National Commission observed that the medical documents produced by the complainant in that case showed that the insured had history of hypertension for five years and that the State Commission under those circumstances was not right in saying that non-disclosure of hypertension was not suppression of material facts. Ajay Prakash Mittal v. Life Insurance Corporation of India, I (1998) CPJ 2 (NC), was a case where the insured suppressed the fact that she was pregnant at the time of the proposal. The National Commission held that that amounted to suppression of material facts. In that case the National Commission further held that the fact that the insured died of jaundice did not make any difference. In Branch Manager, LIC of India, Nalgonda District v. Dornala Lalitha, 1998 ALC (CON.) 253, we held that non-disclosure of the fact that the insured was suffering from diabetes mellitus in his personal statement regarding health amounted to suppression of material fact which had an important bearing on the risk element involved and the decision making exercise on the part of the LIC. In the present case also we have to hold that the suppression by Sri A. Krishna Prasad that he suffered from infective hepatitis and jaundice from 23.4.1991 to 12.5.1991 i.e. within two months from the date of his proposal amounted to suppression of material fact. It is therefore not possible for us to hold that the repudiation by the respondents on the ground of suppression of material fact by the insured was unreasonable or arbitrary or that there was any deficiency in service on their part on that account. In the result, we uphold the order of the District Forum and dismiss the appeal. No costs. Appeal dismissed.