Lic Of India And Ors. vs SURINDER KAUR

THIS revision is directed against the order of the Punjab State Consumer Disputes Redressal Commission, Chandigarh (in short, "the State Commission") dated 10.01.2008 in first appeal No. 732/2003 whereby the State Commission dismissed the appeal of the petitioner insurance company against the order of the District Forum.

BRIEFLY stated, facts relevant for the disposal of the revision petition are that Devinder Singh husband of the petitioner had obtained a life insurance policy from the petitioner for a sum of Rs. 2,50,000/ -. During the currency of the insurance policy Devinder Singh died on 27.2.2000. The respondent/complainant submitted the insurance claim which was, however, repudiated on the ground that Devinder Singh had obtained the insurance policy by misrepresentation and concealment of fact that he was an alcoholic for the last 12 -13 years and was consuming more than one bottle liquor per day for seven years. It was also alleged that fraudulent intention of the insured Devinder Singh stood established from the fact that he died within 11 months of obtaining the insurance policy. Learned District Forum on consideration of the pleadings and the evidence vide order dated 7 May, 2003 allowed the complaint and directed the petitioner to pay the insurance claim to the respondent/complainant as per the terms and conditions of insurance policy with 9% interest per annum from the date of filing of the insurance claim till the date of payment.

BEING aggrieved of the order of the District Forum, the petitioner preferred an appeal. The State Commission, Punjab vide impugned order did not find merit in the appeal and confirmed the order of the District Forum. This has led to filing of revision petition.

LEARNED Shri Ashok Kashyap, Advocate for the petitioner has referred to the order of the Hon''ble Supreme Court dated 1st December, 2006 in civil appeal No. 5334/2006 arising out of SLP (C) No. 17865 -17866 of 2005 and submitted that aforesaid order has originated from two other life insurance claim of Devinder Singh which were also repudiated by the petitioner insurance company on the ground of misrepresentation and suppression of fact. Learned counsel has contended that in the said matter Hon''ble Supreme Court came to the conclusion that the dispute involved in the said consumer complaint was not a matter for decision in exercise for summary jurisdiction. Accordingly, the Hon''ble Supreme Court set aside the impugned orders of the National Commission and relegated the complainants to seek remedy before appropriate forum. It is contended that as the controversy in this revision petition involves exactly similar question of law and fact and the parties are also the same, the complaint is liable to the dismissed with liberty to the respondent/complainant to approach civil Court for seeking appropriate remedy on the same cause of action. Learned Shri Karan Dewan, Advocate for the respondent while admitting the factual aspect of the above contention has argued that consumer complaint in this case was filed on 23.11.2001 and it is not yet resolved. It is contended that if the parties are relegated to the civil court at this stage, it would be unfair to the respondent who is a poor widow. Thus, he has prayed that instead of relegating the parties to the civil court, this Commission may hear the arguments and dispose of the revision petition on merits.

WE have considered the rival contentions and perused the record. On careful consideration of record, we find merit in the contention of learned counsel for the respondent/complainant. Undisputedly the consumer complaint pertaining to the insurance claim in respect of death of Devinder Singh was filed in the District Forum on 23.11.2001. As per the scheme of the Consumer Protection Act the consumer dispute should be decided expeditiously and endeavour should be made to decide the complaint within a period of three months from the date of receipt of notice by the opposite party where the complaint does not require analysis or test of commodities and within five months if it requires analysis or testing of commodities. However, the District Forum took almost one and a half years to decide the complaint vide order dated 7.5.2003. The petitioner thereafter filed an appeal against the order of the District Forum and the State Commission took almost four and a half years to decide the appeal. Revision petition was thereafter filed in the year 2008. Almost seven years have gone by but the revision petition is still pending disposal, meaning thereby that the consumer complaint has been dragged for almost 14 years. If now after 14 years the consumer complaint is dismissed and complainant is relegated to the civil court, it would be most unfair and amount to travesty of justice.

IT may be noted that the issue regarding the jurisdiction of the consumer fora to deal with the cases involving complicated question of law and facts came up before Three Judges Bench of the Hon''ble Supreme Court in the matter of Dr. J.J. Merchant & Ors. v. Srinath : (2002) 6 SCC 635 wherein Hon''ble Supreme Court observed as under: - - "Further, under the Act the National Commission is required to be headed by a retired Judge of this Court and the State Commission is required to be headed by a retired High Court Judge. They are competent to decide complicated issues of law or facts. Hence, it would not be proper to hold that in cases where negligence of experts is alleged, consumers should be directed to approach the Civil Court.

It was next contended that such complicated questions of facts cannot be decided in summary proceedings. In our view, this submission also requires to be rejected because under the Act, for summary or speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided. Therefore, merely because it is mentioned that Commission or Forum is required to have summary trial would hardly be a ground for directing the consumer to approach the Civil Court. For trial to be just and reasonable long drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary. It should be kept in mind that legislature has provided alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground. It would also be totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of facts are required to be dealt with or decided. The Act provides sufficient safeguards."

It appears that above -noted judgment of Three Members Bench of Hon''ble Supreme Court was not brought to the notice of the Two Members Bench of the Supreme Court in Civil Appeal No. 5334/2006. Further, in the instant case short point involved is whether insured obtained the insurance policy by concealment of material information and if so the concealment was so material that it vitiated the insurance contract. In our considered view this small controversy can be effectively dealt with by this fora. Therefore, we do not deem it appropriate to relegate the parties to the civil court after 14 years since filing of the consumer complaint.

IT may be noted that Apex Court followed the judgment of Dr. J.J. Merchant and others (supra) in the matter of Punj Lloyd Ltd. v. Corporate Risks India Pvt. Ltd. in Civil Appeal No. 1026 of 2007 decided on 11 December, 2008, wherein Hon''ble Supreme Court observed as under: "In our view, as already observed, the Commission was not justified in relegating the complainant/appellant to approach the civil court for decision only on the ground that the complaint disclosed disputed questions and contentions which is not required to be dealt with under the Act. For this purpose, we have looked into the statements made in the complaint in detail and in depth. From a look at the statements made in the complaint, it would be difficult to say that the complaint has disclosed complicated questions of fact which cannot be gone into by the Commission and the same can only be gone into by the Civil Court before bringing the respondent on record and asking him to file his defence. The decisions, relied on by Mr. Ranjit Kumar and noted namely, Synco Industries'' case (supra) and the decision in Dr. J.J. Merchant''s case (Supra) were duly considered by Two -Judge Bench of this Court in CCI Chambers case (supra) in detail and after considering the aforesaid two Three -Judge Bench decisions of this Court, as mentioned herein above, and after explaining the same, Lahoti, C.J., (as His Lordship then was) held that the nature of averments made in the complaint was not by itself enough to arrive at a conclusion that the complaint raised such complicated questions as could only be determined by the Commission. While coming to this conclusion, Lahoti C.J., (as his Lordship then was), in paragraph 6 of the aforesaid case in page No. 236 observed as follows:

"It cannot be denied that fora at the national level, the State level and at the district level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice, taking care of such grievances as are amenable to the jurisdiction of the fora established under the Act. These fora have been established and conferred with the jurisdiction in addition to the conventional courts. The principal object sought to be achieved by establishing such fora is to relieve the conventional courts of their burden which is ever -increasing with the mounting arrears and whereat the disposal is delayed because of the technicalities. Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for shutting the doors of any forum under the Act to the person aggrieved."

(Emphasis supplied)

In view of the above noted legal position, we do not deem it proper to relegate the parties to the civil court at this late stage after a protracted trial of 14 years.

COMING to the merits of the case. Learned counsel for the petitioner has contended that impugned orders of the foras below are not sustainable for the reason that the foras below have failed to appreciate that deceased Devinder Singh had obtained insurance policy by suppressing material information that he was an alcoholic and was consuming more than one bottle per day for the last seven years. In support of this contention, learned counsel for the petitioner has drawn our attention to proposal form filled in by the insured wherein he had replied in negative to the question that he was consuming or has ever consumed alcoholic drinks. Learned counsel has also drawn our attention to the certificate of hospital treatment submitted in connected with the claim under the subject insurance policy of Devinder Singh, wherein it is categorically stated that insured Devinder Singh was an alcoholic for the last 12 -13 years and consuming more than one bottle liquor per day for the last seven years. Mr. Karan Dewan, Advocate for the respondent on the contrary has argued in support of the impugned order and submitted that foras below have rightly appreciated the evidence on record.

WE have considered the rival contentions and perused the record. It is well settled that contract of insurance is based on the doctrine of ''uberrima fides'' i.e. utmost good faith. The life assured while obtaining the insurance policy is under obligation to truthfully answer the questions concerning material aspect with respect to his/her life at the time of submitting the proposal form and if some material information is withheld or concealed, it vitiates the insurance contract and the insurer cannot be held liable to pay the insurance benefit under the insurance contract. Reference be made to the judgment of the Supreme Court in the cases of P.C. Chacko & Anr. v. Chairman, LIC of India : (2008) 1 SCC 321 and Satwant Kaur Sandhu v. New India Assurance Company : (2009) 8 SCC 316.

ON perusal of record, we find that in column 11 of the proposal form filled by the insured on 31.03.1999, certain information regarding the physical health and habits of the insured was sought. In response to question 11 (h), Devinder Singh answered in negative, meaning thereby that he did not use or consumed alcoholic drinks. This information provided by the insured for obtaining insurance policy was obviously false because on perusal of certificate of treating hospital issued in connection with insurance claim in respect of death of Devinder Singh, we find that in this form it is recorded that Devinder Singh was admitted for treatment in the hospital with the following history: "Devinder Singh aged 34 year male chronic alcoholic for the last 12 -13 years consuming more than one bottle for past 7 years had presented to DMC hospital with pain abdomen, vomiting multiple episodes, altered sensorium for 7 days and he was diagnosed as suffering from insulin dependent diabetes mellitus, Ald (Alcoholic liver disease) and hepatic encephalopathy, Acute on CRL (chronic renal failure), cardiorespiratory arrest."

Thus, it is clear that Devinder Singh had obtained life insurance cover by concealing material fact. Therefore, in view of law laid by the Supreme Court, the petitioner insurance company was well within its rights to repudiate the claim and cannot be termed as deficient in service.

ON perusal of impugned judgment, we find that State Commission while returning the finding in favour of the complainant was influenced by the fact that as per the certificate of hospital treatment, history of Devinder Singh was given by his brother -in -law and not by the insured himself. The State Commission also observed that it is not clear from the record whether Jaspal Singh, brother -in -law who gave history was brother of wife of the insured or husband of sister of insured and, therefore, it cannot be concluded that he had full knowledge of the life style of insured Devinder Singh and he might have given the history on guesswork. Aforesaid reasoning given by the State Commission in our view is erroneous. When a person is escorted to the hospital for treatment by someone, that person under normal course of circumstances is expected to give correct history to the treating doctor so that patient could be given proper treatment. Thus, there was no cogent reason for rejecting the history recorded in the certificate confirming that insured was an alcoholic for the last 12 -13 years and consuming more than one bottle liquor per day for the last seven years.

IN view of the discussion above, we are of the view that foras below have committed a grave error in ignoring the above medical history of the insured indicating that he had obtained insurance policy by concealment of material facts in the proposal form. Thus, in our view, insurance company was justified in repudiating the claim. The orders of the foras below cannot be sustained. Revision petition is, therefore, allowed, orders of the foras below are set aside and complaint is dismissed.