L.I.C. Of India vs SANTANAMARI @ VEMBU

THIS appeal is directed against the order dated the 24th day of June, 1998 in C.O.P. No. 11/98 on the file of the District Consumer Disputes Redressal Forum, Tirunelveli.

THE appellant LIC of India is the opposite party while the respondent is Santhanamari @ Vembu is the complainant. The complainant''s husband is one Kandasamy. During his life time he took a Medical Life Policy on 14.9.1996 with the opposite party Insurance Company after undergoing full medical tests. One Dr. P. Subramaniam, the opposite party''s approved Medical Practitioner examined the complainant''s husband and gave him a clear and good health certificate at the time when the policy was obtained. On 14.9.1996 the Branch Manager of the opposite party, it is said, also issued a Certificate rectifying the general state of health of the insured being good. Unfortunately, the complainant''s husband died on 11.1.1997 due to heart attack.

The complainant, nominee, preferred a claim to the opposite party. The Divisional Manager of the opposite party L.I.C. by his order dated 21.4.1997 rejected the claim of the complainant. Though the order of rejection was dated 21.4.1997, yet it was served on the complainant only on 9.6.1997. By the repudiation so made, the complainant suffered much mental agony and hardship.

SHE is entitled to a sum of Rs. 1,00,000/- with interest @ 18% p.a. from 11.1.1997 till actual payment. SHE would also estimate a sum of Rs. 10,000/- as damages for mental agony and hardship suffered by her. On the details as stated above, the complainant came forward with a complaint before the Forum below to direct the opposite party to pay a sum of Rs. 1,00,000/- with interest @ 18% p.a. from 11.1.1997 till payment and to pay a sum of Rs. 10,000/- as damages for mental agony and hardship suffered by her with costs of the complaint.

THE opposite party filed a written version denying the allegations in the complaint. THE repudiation of the claim made by the opposite party is on sound lines. THE complainant''s husband suppressed certain vital facts and made mis-statements relating to his health. THEre is no deficiency in service on the part of the opposite party. THE complaint as such deserves to be dismissed. The Forum below after taking into consideration the relevant materials placed on record and of course after hearing the projection of hues of views of the parties through their respective Counsels ultimately rendered a finding that there was deficiency in service on the part of the opposite party and directed the opposite party to pay Rs. 1,00,000/- with interest @ 18% p.a. from 11.1.1997 till payment to the complainant in respect of the life insurance policy of the complainant''s husband and also to pay a sum of Rs. 1,000/- towards costs of the complaint to the complainant within a period of 2 months from the date of its order besides stating that the complaint in other respects shall stand dismissed. Aggrieved by this order, the opposite party resorted to the present action.

ARGUMENTS of learned Counsel Mr. R.S. Ramanathan, appearing for the appellant/opposite party and learned Counsel Mr. T.S.R. Venkatramana, appearing for the respondent/complainant were heard.

EVEN at the outset we may point out that there are absolutely no merits to warrant interference of the order of the Forum below. There is no pale of controversy that the complainant''s husband took a medical policy on 14.9.1996 with the opposite party Insurance Company after undergoing a medical check-up. It is also not in dispute that the cover under the policy is to the tune of Rs. 1,00,000/-. The other fact about which there is no controversy is that the policy was kept alive even during the time of the death of the complainant''s husband which event happened on 11.1.1997. The one and only objection for the repudiation of the claim made by the complainant was that he husband before taking the policy with the opposite party Insurance Company suppressed certain vital factors in relation to his health and therefore it is that the opposite party Insurance Company repudiated the claim so made. The question now for consideration is as to whether the complainant''s husband as a matter of fact suppressed any vital factor in relation to his health before ever the policy was taken with the opposite party Insurance Company. It is not as if the policy in question is a non-medical policy. The sordid fact is that the policy is a medical life policy. The policy had been issued after the examination of the complainant''s husband by a competent Doctor employed for the opposite party Insurance Company. It is only after such examination and verifying from the report of such Doctor that the complainant''s husband at the relevant point of time was at the pink of his health the policy had been issued. This apart we are able to perceive from Ex. A1 the Certificate issued by the Branch Manager of the opposite party that the complainant''s husband was in a sound state of good health at the relevant point of time. It is not as if the Certificate had been issued by the Branch Manager without making any due enquiries and the plain fact is that he in fact was stated to have made certain enquiries and from the enquiries he made that he was satisfied that the complainant''s husband was enjoying good health. In column 3 of the Certificate issued the answer to the question namely, What is the General State of Health of the Life Proposed is "Good". The Branch Manager appended a Certificate as below at the fag end of the Certificate so issued. "I am satisfied with the identity of the party and, on the basis of my independent enquiries, I hereby declare that the foregoing statements are true and correct."

The opposite party Insurance Company who placed so much of reliance on Ex. B1 Proposal for Insurance on own life. In the said proposal under Ex. B1 certain questions are required to be answered by the insured under the heading Personal History. The relevant questions appearing under Personal History are relatable to the questions under (a), (b) and (d). The question under (a) reads as below : (a) During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week ? The answer to the question is couched in Tamil as "xxxx". The question under (b) is as below : (b) Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation ? The answer to the question is reflected in Tamil as "xxxxx". The question under (d) reflects as below : (d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System ? The answer to the question also couched in Tamil as "xxxx".

The opposite party Insurance Company at this juncture also drew our attention to Ex. A3 the interrogatory issued to Dr. A. Subramaniam, M.S., Civil Surgeon, and Ex. A4 the reply given by the said Doctor pursuance to the interrogatories issued to him. The interrogatory issued under Ex. A3 is as below : "It has been brought to my notice by LIC, Tenkasi, in the above case that you have given : (a) Certificate of treatment and (b) Certificate of hospital treatment regarding one late Kandasamy of Sengottai (Copy enclosed). You have stated that he reported to you that he was suffering from Chest Pain loss of appetite, etc., and you treated him for "Peptic Ulcer". Kindly clarify the following: (a) Can Peptic Ulcer generate chest pain. (2) Can that Chest Pain can be equated to a pain in the heart resulting in heart attack Please note that the letter is written to file your reply in Consumer Forum, Tirunelveli."

The answer furnished to the interrogatory issued under Ex. A4 by the Doctor is as below : "With reference to your letter dated 31.5.1998 regarding C.O.P. 11/98 of late Kandasamy with reference to his claim from LIC, Tenkasi, I have given certificate of treatment and certificate of hospital treatment. He had treatment for Peptic Ulcer as out patient and he complained of chest pain at that time. As per you question No. 1, I want to clarify that Peptic Ulcer can generate chest pain. With reference to your question No. 2, I am to state that chest pain due to Peptic Ulcer cannot be equated to a pain in the heart. Because heart pain (Due to heart disease) will be different and which can be differentiated by an experienced Doctor. Peptic Ulcer pain is called "Heart Burn" and not heart pain. With this type of "Heart Burn" nobody can predict that the patient will develop heart attack because of this Peptic Ulcer. This is for favour of you kind information."

The answers made by the said Doctor under Ex. A4 would clearly point out that the husband of the complainant at no point of time suffered any heart ailment in the sense of having mio-cardial infarction at any point of time and what is getting revealed therein was that he was suffering from Peptic Ulcer and consequent chest pain and the chest pain so caused to the Peptic Ulcer pain he would say is called "Heart Burn" and that cannot be equated to a pain in the heart. He would also say that heart pain will be different and such a pain can be differentiated by an experienced Doctor. In such circumstances, it cannot be stated that the complainant''s husband was suffering at any point of time from heart pain that is to say mio-cardial infarction prior to his taking the policy. Of course, as already been stated in the answers given to the questions put under Personal History in the Proposal Form he had denied having taken treatment for any ailment prior to his taking the policy with the Insurance Company. The fact that he had stated in the Proposal Form that he had not been admitted as an in-patient for more than a week is of no consequence on the facts and in the circumstances of the case even though it was subsequently revealed that he was admitted as an in-patient for one day prior to his taking the policy for his ailment. The suppression of such ailment and is being an in-patient for one day, we rather feel on the facts and in the circumstances of the case and the nature of the ailment cannot at all be stated to be suppression of vital factors enabling the Insurance Company to repudiate the claim made by the complainant, nominee. In this view of the matter, we rather feel that there is deficiency in service on the part of the opposite party as had been held by the Forum below. 12. The Forum below after all granted Rs. 1,000/- towards the cost of the complaint which we feel in the circumstances of the case is reasonable not calling for interference.

The Forum below, of course, granted interest @ 18% from 11.1.1997 the date of death of the complainant''s husband. We rather feel that the award of interest @ 18% is uncalled for. The reason is rather obvious. The opposite party Insurance Company cannot make any investment other than in Government Securities which may not fetch more than 12% interest. This has been stated so by the Apex Court of the country in decisions more than one. Therefore we reduce the rate of interest from 18% to 12% p.a. The Forum below also, as indicated earlier, awarded interest from the date of death of the insured that is to say on and from 11.1.1997. Award of interest from the date of death of the insured is not proper and if at all if the Insurance Company opposite party is to be mulcted with the liability for payment of interest that can be done so on and from the date of the repudiation of the claim which event in this case happened on 21.4.1997.

AS such the order of the Forum below is modified directing the opposite party to pay Rs. 1,00,000/-, the policy amount with interest @ 12% p.a. from 21.4.1997 till date of payment to the complainant. The appeal is thus disposed of with the modification of the order of the Forum below as indicated above. We however direct the appellant/opposite party to pay Rs. 5,000/- by way of costs of this appeal to the complainant. We further direct that the policy amount of Rs. 1,00,000/- with interest @ 12% p.a. till the date of payment to the complainant besides costs of Rs. 5,000/- should be paid to the complainant within one month from the date of the receipt of the order by the opposite party Insurance Company. If the order of this Commission, as stated above, is not complied with, it will be open to the complainant to resort to the provisions of Section 27 of the Act for execution of the order of this Commission. Appeal disposed of.