Life Insurance Corporation of India vs Ab.Aziz Bhat

Syed BashirUdDin, J.—Mst. Azi Begum, Respondent's mother, was insured by Appellant, LJC, under policy issued on 3061994 and the

basic sum assured was Rs. One lakh. The first instalment was paid on 1541994. The policy was to. last from 1861994 to 1862011, Azi Begum

died on 15101994. Her son, nominee under the policy, respondent, filed claim on 26121994 with Life Insurance Corporation of India and the

latter asked the nominee to file documents in respect of age of the insured and cause of her death. The respondent alleges, that all the documents

were before the appellants, therefore, he was not required to file the documents. The L.I.C got the claim investigated after it noted that the date of

birth of the assured was wrongly stated, and further as the assured died within two years of issuing the policy, an inquiry was conducted as per

provisions of law and rules. The investigations and other inquiries revealed that the assured had made wrong statement of her age. The LJC,

concluded that there was intentional suppression of material fact as to assured's age. It repudiated the claim and informed the nominee of the

repudiation of the claim on 2081996. The nominee, respondent, approached the State Consumers Protection Commission, Srinagar, (hereafter for

short, the Commission) and filed a complaint for recovery of the basic assured sum and for compensation.

The commission, on receiving objections and evidence, on inquiry, ordered opposite party to pay the assured amount of Rs. One lakh with 18%

interest within specified period of six weeks from the date of order with observation that the interest allowed at the rate of 18% would take care of

compensating the complainant for loss and injury suffered by him. This order of 141097 of the Commission is impugned in this appeal.

The counsel for the appellant submits that the material fact of true age of the assured Mst. Azi Begum was suppressed. There was

understatement of her age. Respondent, her son, nominee is insured with the L.I.C. The nominee and the assured in league have shown the date of

birth of Mst. Azi Begum as 2.4.1946, thereby , indicating her age on the date of proposal about 48 years and further Mst. Azi Begum was shown

to have read upto 5th Primary, when in reality she was illiterate. As on 15.4.94, the nominee in the policy covering his own life has shown his age

as 49 years and given his date of birth as 15.4.1945 and shown age of his mother as 73 years. Thus seen the age of assured, cannot be less than

80 years in October 1994. She died just 3 1/2 months after taking the policy for her life.

In suppression of the material facts and on manipulative age entry, assured and her nominee made the Corporation to believe state of facts and

to act, in a manner which the Corporation would not have otherwise believed and acted upon. Therefore, in terms of Section 45 of the Insurance

Act of 1938, read with Policy holders Servicing Mannual No. II ( Claims ) page. 44 under Sub Head 2.1, the LI.C repudiated the claim. The

commission, despite triable issues being raised before it, did not uphold the contention of the appellants regarding repudiation of the claim, Due to

concealment of age factor, the nominee or for that matter the heirs of the deceased policy holder are not entitled to any claim against the said

policy.

Respondent, Abdul Aziz Bhat, made submissions in person after opting not to avail service of an advocate. He submits that the proposal for

assurance on the life of Mst.Azi his mother, as made on 02041994, was accepted by LJC on 30.6.94. UC accepted premium on 150494 and

issued receipt. The policy on the life of the assured was issued at leastafter about three months. The time period was consumed by the LJC to

process and in verification of the case. After processing and verifying the contents and other required particulars, it accepted the proposal and

issued the policy. The correct age of the assured Mst.Azi was disclosed to LJC .Even, the fact that Mst.Azi was illiterate was also disclosed. At no

point of time dither Mst. Azi or his nominee ever represented before the LJC that Mst.Azi had read upto 5th primary or that she was in position to

sign any paper. The prescribed forms ( proposal, medical report and age memo ) produced by LJC have not been executed by her. The signatures

of Mst. Azizi Begum in the relevant columns are not of his mother who was illiterate, but of some other Azizi Begum. Infact, the real proposal and

other prescribed forms which Mst Azizi has filled and presented before L.I.C, have not been placed on record. The above referred proposal and

other prescribed forms produced in the case are not the very proposal and forms which Mst Azizi, his mother, has got filled and filed before LJC.

The forms have been manipulated and the original proposal and form is kept off record. A bare look at these forms will reveal that they are full of

cuttings and overwritings The forms are nothing but sheer manipulation. The appellant after issuing the policy on acceptance of the proposal of

insurance on the life of Mst Azizi, is duty bound to place the real, genuine and actual documents before the Commission and the Court, which they

have failed to do. All this has been done to deprive the claimant of the claim, which he has over the sum of rupees one lakh as nominee (and heir

and successor to the heritable estate) of his mother Mst. Azizi.

There is no dispute that Mst Azizi Begum held an insurance policy of Rs. one lakh on her life valid from 1861994 to 1862011.Her proposal of

April 2nd, 1994 was accepted and the first instalment of premium was deposited with the L.I.C on 15.4.1994. The proposal was accepted and

the policy was issued to her on 30.6.1994. She died a natural death on 15.10.1994. The nomineerespondent filed claim on 26.12.1994. On failure

to finalise the claim and make the payment, respondentnominee approached the commission and on, 2471996 filed complaint 135/96 before the

Commission. During the pendency of this complaint, the respondent repudiated the claim.

The appellant/opposite party before the Commission raised the plea of suppression of material fact of age and fraudulant perpetration of facts by

assured and her nominee, which made the LI.C to issue the policy which it may not have, had it known true facts. However, this argument did not

find favour with the Commission. The Commission on noting submissions of the respondent of manipulation of the proposal and other record,

summoned the original record from the appellant/Coy. The Commission examined the evidence led before it and evaluated the circumstances of the

case. It came to the conclusion that the proposal and forms produced before the Commission , were not the ones filed by the assured before

L.I.C. It found that the documents were full of overwriting and erasers. The assured was shown literate having affixed her signature on the file,

whereas, assured was actually illiterate and she did not know how to write or sign.

We examined the record. The appellant before us has not pointed to any evidence to show that the proposal form was in fact and reality filled in

or written by the assured or at the behest of the assured or her nominee. We find from proposal form that, in the column of age, there has been

cutting and overwriting without any initial. There is no explanation whatsoever to suggest who actually is responsible for these erasers, cuttings and

overwriting. The signature of Mst. Azizi on medical report also is found spurious since the said lady is admittedly a rustic illiterate woman. Though

the opposite party has taken the same stand before the Commission in his objections, as it is canvassing in appeal before this court, the fact

remains that the L.I.C has led no evidence to show that the forms which it has placed on record are in fact the very forms which Mst. Azizi, the

assured, filed and on acceptance of which the policy was issued.

Shri P.S. Bali ( Manager Sales ) and Manzoor Ahmad Khosa (A.A.O) of L.I.C have in their affidavits banked on the above spurious proposal

forms which they have placed on record. Mr. Bali, in his cross examination has stated that he has not seen the deceased even proposal forms have

not been received or accepted by him. The facts are not being investigated as the insurance business is essentially based on good faith. He also

admits that he was not posted in the concerned office at the relevant time, when the proposal was accepted and policy issued. The other witness,

Shri Manzoor Ahmad Khosa, has also revealed in his cross examination, that he has no personal knowledge in the matter and that he was never

posted in Unit No.l, which dealt with the claim of the respondent. No other witness has been examined. Neither of the two witnesses has on closer

scrutiny stated that the proposal form, medical report and the age form part of the Commission file and allegedly basis for issuance of policy of

insurance, are the very documents on the faith of which the appellants acted in good faith and issued the policy. This assumes importance in the

face of the evidence and crossexamination of the nominee that the above documents produced by the UC were fabricated and the original

documents executed by the deceased which in fact were the genuine documents have been withheld from the commission and not produced before

it by the opposite party/appellant. There is formidable basis for the contention of the respondent that the documents produced by the opposite

party before the Commission (which are also available before this court) are not the original and genuine documents.

In reply to part of para 1 of the complaint providing that the proposal was made on 02041994, the opposite party in its objections by way of

reply has stated that the averment is ""materially accepted as correct"". In other words, the proposal and the form thereto is admitted to have been

made and executed on 02041994, whereas, the proposal form placed before us bears the date of execution as 21041994. It clearly shows that

despite agreement of parties on the date of proposal as 02041994 and the form being executed thereto, the proposal produced before the

Commission with date as 21041994 is not the proposal which was made and executed on 02041994 and which culminated in issuance of the

policy. It is further seen that in the said proposal, age of Mst.Azizi Begum is shown as 48 years . There is cutting and overwriting, both as to her

age and date of birth. Even, there is cutting in the name of the husband of the assured and even to the sum of assurance proposed.

In the column of education/qualification she is first shown as middle and then there is cutting and overwriting to show it as 5th primary. There

appears signature of some one as a witness on the proposal, but initials cannot be spell out to suggest the name of the witness or any other witness

to indicate that the proposal specifically relates to the deceased Mst. Azizi Begum and to explain the erasers, cuttings and overwriting on material

particulars and names incorporated in the proposal and other prescribed forms. This again is a circumstance which points to spurious nature of the

documents. It is admitted by the parties that the above documents which included the proposal form, medical report and age form of the deceased

have through out remained in possession and custody of the LJC from very inception till the documents were produced before the Commission. It

is only the L.I.C, Appellant, that could have offered and placed on record explanation and reasons, thereto, if it so desired, instead of messing up

of matters and making its case highly doubtful.

The contention of the opposite party that the matter has been got investigated through A.M.S, consultants and that this investigating agency has

on information supplied by the chowkidar of the concerned village concluded that the age of the assured on the relevant date was 80 years and not

48 years, cannot be accepted for the reason that whatever the investigation has taken place that has been conducted at the back of the claimant

who has a vested interest in the claim as part of deceased's heritable estate. The respondent was to be associated with the inquiry or investigation,

if any, in so far as it adversely effected his interest and claim, if the LJC was to escape the charge of infringing applicable principles of natural

justice to this case. This apart, even on the statement of the Chowkidar, which the consultant says he got from him, it cannot be concluded that

whatever the Chowkidar said necessarily related to the assured. Moreso, when the matter is to be seen in the context of the Commission finding

that Mst.Azizi Begum was illiterate and had no schooling and the documents placed in this case were not the original and genuine documents which

were although in custody and possession of the LJC.

In these circumstances, the plea that the deceased suppressed the material fact of reporting herself as under age in the proposal and other

prescribed form, is based on no evidence. The preponderance of probabilities, norms of proof for civil cases, fully substantiates the conclusions

arrived at by the Commission. The award of the assured sum of Rs. one lakh to the claimant(s) is sustainable. The repudiation of the claim by the

LJC is not based on any evidence, material and documents.

No other contention is raised before us. The result is that, in the totality of facts and circumstances of the case, the appeal merits dismissal and

we accordingly order dismissal of appeal, leaving parties of bear their own respective costs.