Life Insurance Corporation of India vs AMRUTH S. NIMBALKAR

THIS is an appeal filed by L.I.C. arrayed as opposite party before the District Consumer Disputes Redressal Forum, Bijapur, challenging the order dated 31.5.95 passed by the District Forum, in Complaint No. 24/91 on its file.

THE respondent-complainant alleged that the appellant-L.I.C. has withheld the amount on the life of his wife Jagadevi Ambi during her life-time. Deceased Jagadevi Ambi was working in the Department of Backward Classes and Minorities, Bijapur, and she sent a proposal for insurance on 8.5.1989 to cover her life in a sum of Rs. 25,000/-. THE proposal was accepted and matured into a policy with effect from 14.5.1989. Within a short time thereafter, she expired on 19.7.1989. After the death of his wife, the complainant put forth his claim being a nominee under the policy. L.I.C. repudiated the claim of the nominee-complainant under its letter dated 11.3.91. In the said letter, L.I.C. referred to certain answers given by the deceased for the questions asked in the proposal form. In that, the relevant portion reads thus : "Q. No. Questions Answers 17(a) What has been your usual state of health ? Good 18(a) Have you ever suffered from or are you suffering from persistent cough, asthma, bronchitis, pneumonia, pleurisy, spitting of blood, tuberculosis or any other disease of lungs ? No 18(b) Have you ever suffered from or are you suffering from high or low blood pressure, rheumatic fever, pain in chest,reathlessness, palpitation, infraction, or any disease of the heart or arteries ? No 20. Have you consulted a medical practitioner, within the last five years for any ailments requiring treatment for more than a week ? No We may, however, state that all these answers were false as we hold indisputable proof to show that about 3 years before she proposed for the above policy she had suffered from Urticaria and Br. Asthama for which she had consulted a medical man and had taken treatment from him and also in a hospital. She did not however disclose these facts in her proposal/Personal statement. Instead she gave false answers therein as stated above.

The contention of L.I.C.-appellant was that they were justified in repudiating the claim of the complainant as there were sufficient materials to hold that the insured had withheld the material information regarding her health at the time of effecting the insurance.

THE District Forum went into the question of liability of the insurer and after considering the merits and demerits of the case, accepted the case of the complainant and directed the insurer to meet the claim of the complainant. Mr. M.L. Visweswaraiah, the learned Counsel for the appellant, contends before us, that the District Forum was not justified in going into the merits of the case when the L.I.C. has repudiated the contract of insurance on the basis of the acceptable materials. In this connection, the learned Counsel for the appellant relies on a decision of the Hon''ble National Commission dated 16.2.95 in R.P. No. 435/1994, wherein it is stated thus : We have examined the letter of repudiation which forms part of the paper book and we do not find it possible to say that the repudiation has been made by the insurer without due application of mind to relevant facts or in an arbitrary otherwise than in good faith. The grounds stated in the letter of repudiation may not be legally or factually correct but that is a matter for determination by the Civil Court and not by the Consumer Forum when ex facie there is nothing to show that the grounds are wholly untenable. In the circumstances, we set aside the orders passed by the State Commission and the District Forum and dismiss the complaint petition reserving liberty to the complainant to pursue the remedy by way of institution of civil suit before the competent Civil Court. We make it clear that we are not expressing any opinion on the merits of the claim put forward by the complainant or even on the question as to whether the repudiation of liability by the Insurance Company was proper or justified on the facts which can be established only after scrutiny of the evidence that may be adduced by the parties before the Civil Court.

IN the instant case before us, the appellant has produced two certificates issued by Dr. Rajiv M. Chidgupkar, wherein it is stated that the deceased was suffering from Bronchial Asthma and also Urticaria. No doubt these certificates have been issued in the year 1995. But according to the learned Counsel for the appellant, the deceased should have made frank disclosure of materials relating to her health as a contract of insurance is of utmost in good faith. If the Consumer Forums are satisfied with the repudiation letter i.e., that the insurer had material which shows prima facie that the insured had suppressed certain material particulars and that the repudiation was made bona fide after application of mind to the said material then the Consumer Redressal Agencies cannot go further. Their duty is to refer the parties to the Civil Court. We are of the view that the impugned order will have to be set aside. We make it clear that the complainant has every right to approach the Civil Court, and we do not want to express any opinion on the merits of the case. We further make it clear that the opinion expressed by the District Forum regarding merits of the case cannot affect, in any way, the parties concerned. The appeal is, therefore, allowed. Impugned order passed by the District Forum is set aside, and the complaint is dismissed. No costs. Appeal allowed. ____________