JAGDEEP ARORA vs LIFE INSURANCE CORPORATION OF INDIA & ORS.

This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 05.09.2014, passed by the U.P. State Consumer Disputes Redressal Commission (for short ''the State Commission'') in Appeal No. 386/2011, vide which while allowing the appeal, the order passed by the District Forum, Agra, allowing the Consumer Complaint No. 236/2008, was set aside.

Briefly stated, the facts of the case are that one Bhupendra Singh Arora who was working as General Manager in M/s. ITP Ltd. at Shyamguir Tea Estate, District Sontpur, Assam, had obtained three different insurance policies from the respondent Insurance Company in February/March 2006, at a single premium, with total sum assured 17,50,000/-. The said Bhupendra Singh Arora died on 13.03.2007, i.e., within almost one year of taking the aforesaid policies and the reason for his death has been stated to be Cardio-respiratory Failure in a case of Right Renal Cell Carcinoma. The deceased left behind his wife Smt. Jagdeep Arora, who is the present petitioner and complainant no. 1. He also left behind one daughter and one son who are complainants No. 2 & 3 in the consumer complaint no. 236/2008. As stated in the complaint, the complainants are entitled to receive a total sum of 28,77,834/- as per the terms and conditions of the policies with all bonus benefits. However, the OP LIC had made payment of 17,83,971/- out of the said dues and the balance amount of 10,93,863/- had been wrongly deducted/detained by the OP. The petitioner/complainant made a prayer that a sum of 13,56,389/- should be paid to them including interest 2,62,527/- from 13.03.2007 till the date of petition and also, a sum of 2 lakh should be paid by way of damages. The complainants stated that at the time of taking the policy, the petitioner was not suffering from any disease and hence, no concealment of any kind was made by him. He was a good tennis player and he got certificate from his Club, i.e., Tejpur Station Club Limited, Tejpur, Assam for his best performance in Chummery Cup final on 28.01.2007 as he had won that tournament. This fact showed that he was possessing good health, having no disease at all. He died due to right renal carcinoma on 13.03.2007, but the said disease was detected for the first time on 12.02.2007, when he was admitted to the Hospital.

The complaint was resisted by the LIC by filing written statement before the District Forum in which they stated that the said policies had been obtained by giving false, misleading information about the state of health of the deceased. The deceased had given wrong answers to questions in the proposal form, and stated that his health condition was good. In fact, the deceased was suffering from hypertension for more than 20 years and the case history made by the Wockhardt Hospital, Kolkata where he remained admitted and died on 13.03.2007, indicates that he had been suffering from a number of problems for a long time. LIC had, therefore, rightly made payment of 17,83,971/- only and deducted a sum of 10,93,863/-.

The District Forum after taking into account the evidence of the parties came to the conclusion that there was no concealment of any disease on the part of the deceased at the time of obtaining the policies and he was not suffering from any disease on the date of taking the Insurance policies. The District Forum directed the OP to pay a sum of 10,93,863/- alongwith interest @9% p.a. from the date of filing the complaint till realisation and also to pay 2,000/- as litigation expenses. Being aggrieved from this order, the LIC went in appeal before the State Commission, which allowed the said appeal and set aside the order of the District Forum, holding that there was suppression of material facts, while obtaining the said policies by the deceased. Being aggrieved from the impugned order, the complainant No. 1 has filed the present revision petition before us.

It has been contended by the learned counsel for the petitioners during arguments that the deceased was not suffering from any disease at the time of obtaining the said policies. He died of right renal cell carcinoma which was detected first time at the time of his admission at the Wockhardt Hospital on 12.02.2007. The learned counsel has drawn our attention to the discharge summary made by Wockhardt Hospital, in which they prescribed a number of medicines to be taken by the deceased, but they did not prescribe any medicine for hypertension. It has been stated under the head, ''medical problems'' in the said summary that the deceased had hypertension, 20 years back and he was on medication. It is also mentioned that he was borderline diabetic and had dyslipidamia. However, in the medical attendant''s certificate given after the death of the deceased by Dr. Ashish Chaudhary, it had been stated that the diagnosis was ''sudden''. It was clear, therefore, that the deceased did not conceal anything from the OP at the time of obtaining the policy. The learned counsel has also drawn attention to medical examiner''s confidential report signed by Dr. Yogesh Kaushal in which the blood pressure of the deceased has been recorded as 126/82, which was normal, indicating that there was no evidence of hypertension.

The learned counsel for the respondent stated that while filling the proposal form for obtaining the said insurance policy, the deceased had intentionally suppressed information about his previous disease and had given the answer ''No'' to all questions concerned with personal health problems. At the time of his admission at Wockhardt Hospital, mention has been made about the diseases from which he was suffering, but he never disclosed the same to the Insurance Company. The learned counsel pointed out that as held in a catena of judgments pronounced by the Hon''ble Apex Court and this Commission, the complainants were not entitled to be given any relief, because of the failure of the deceased to provide correct information about his health condition at the time of taking the policies. At the time of arguments, the learned counsel for the respondent submitted certain documents containing the case history of the deceased maintained by Wockhardt Hospital, Kolkata from 12.02.2007 to 13.03.2007, a copy of the serology report dated 02.09.2005 from B. P. Poddar Hospital and Medical Research Limited and copies of affidavit and written arguments filed before the State Commission etc. In particular, the learned counsel for the respondent has drawn our attention to the order passed by the Hon''ble Supreme Court in "Satwant Kaur Sandhu vs. new India Assurance Co. Ltd." reported in 2009 (4) CPJ 8 (SC)" in support of his contentions.

We have carefully examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

The basic question that arises for our consideration is whether there has been a suppression of information or giving false information on the part of the deceased to the Insurance company at the time of taking the three policies in question. A perusal of the proposal forms filled-up by the deceased reveals that he had answered all questions regarding his previous health history in the negative, indicating that he never suffered from any ailment or ever remained admitted in any hospital etc., or ever consulted any medical practitioner for an ailment requiring treatment for more than a week. The OP LIC have, however, taken the plea that the discharge summary of the Wockhardt Hospital, Kolkata (typed copy of which has been attached with the Revision Petition), states as follows:- "H/O PRESENT ILLNESS

History of fever and pain right upper back. No history of haematuria. No other urinary problems.

PSH: 1996 wisdom tooth extraction; 1998 lap Cholecystectomy; 2005-Fall (Posterocentral disc protrusion noted L5/S1) Medicap Problesm: Hypertension ; Borderline Diabetic; Hyperglycemia; Dyslipidamia"

Further, a photocopy of the case history maintained by Wockhardt Hospital, Kolkata, which was produced at the time of arguments, records as follows:- "C/o Fever since 2 weeks Pain in both legs & thigh & Right Upper back. PSH : 1996 Wisdom tooth extraction 1998 lap cholecystectomy 2005 Fall (Posterocentral disc protusion noted L5/S1)

Medical Problems: Hypertension 20 years back on medication Borderline Diabetic Dietary control Occasional OHA Hyperuriemia Was taking ........

Now stopped since 1 month Dyslipidamia"

A perusal of the discharge summary and the case history made by Wockhardt Hospital, Kolkata shows that the insured was suffering from many medical problems including hypertension. It has been mentioned that he had hypertension 20 years back and was on medication for the same. Moreover, he was borderline diabetic and had hyperglycemia. The version given by the OP LIC in their written reply to the complaint and in their memo of appeal before the State Commission that the insured had concealed material information from them, while filling up the proposal form for obtaining the said policies, stands established from record, therefore. It was the duty of the insured to make a true and complete disclosure about his health condition at the time of filling the proposal form. On the other hand, the insured stated categorically that he never suffered from diabetes, tuberculosis or high blood pressure. The allegation of suppression of material information on the part of the insurer has not been explained by the complainants.

Section 45 of the Insurance Act, 1938 provides as follows:- "45. 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 calf two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal 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: 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."

In the present case, however, the death of the insured has taken place within about one year of taking the policy, meaning thereby that the benefit of section 45 cannot be provided to him, even if the misstatement made by him was not fraudulently made. It is clear, however, that since the insured was on medication, his ailments were very much within his knowledge and he was bound to disclose the same while obtaining the insurance policy. Hon''ble Supreme Court in the case of " Satwant Kaur Sandhu vs. New India Assurance Company Ltd." [supra] , have observed as follows:- "The upshot of the entire discussion is that in a Contract of Insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a "material fact" . If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a Contract of Insurance."

Hon''ble Court further observed in the said judgment as follows:- "Judged from any angle, we have no hesitation in coming to the conclusion that the statement made by the insured in the proposal form as to the state of his health was palpably untrue to his knowledge. There was clear suppression of material facts in regard to the health of the insured and, therefore, the respondent - insurer was fully justified in repudiating the insurance contract. "

It is an established legal proposition that if any such information about the medical condition of a person which could influence the mind of a prudent insurer is not disclosed to him, it amounts to suppression of material facts and the insurer is very much within his rights to repudiate the claim.

The LIC have tried to explain in their supplementary affidavit filed before the State Commission that all three insurance policies were single premium under table 173 (Jeevan Plus Plan) which is market-based unit-linked plan. The LIC have stated that as per guidelines to settle claims under table 173, if the claim is repudiated, then sum insured is not payable, rather 90% of the bid value or net asset value (NAV) becomes payable after deducting 1% as surrender charges, if death occurs within one year of the first premium receipt (FPR) on the principle of ex-gratia payment. The LIC have explained that the amounts were calculated as per this principle in respect of the three policies in question.

Based on the discussion above, we are of the view that the OP, LIC has not shown any deficiency in service towards the complainant, because they took the decision to repudiate the claim, based on the fact that the insurer had concealed material information about his medical condition from them at the time of obtaining the policies in question. We, therefore, find no valid ground to interfere with the well-reasoned orders passed by the State Commission in the exercise of our revisional jurisdiction. The said order is, therefore, upheld and the present revision petition is ordered to be dismissed with no order as to costs.