Life Insurance Corporation of India vs BALBIR SINGH

-AMRITPAL Kaur daughter of the respondents had purchased life insurance policy from the appellants on 15. 9. 2004 for an amount of Rs. 50,000. Said Amritpal Kaur died on 20. 7. 2005. The respondents lodged the insurance claim with the appellants but it was repudiated by the appellants vide letter dated 31. 3. 2006. Hence the respondents filed the complaint in the learned District Consumer Disputes Redressal Forum, Sangrur (in short "district Forum") for the reimbursement of the insurance amount, interest and costs.

THE appellants filed written reply. It was admitted that life insurance policy was issued by the appellants in favour of Amritpal Kaur for an amount of Rs. 50,000 with the date of commencement as 23. 10. 2004. It was also admitted that said Amritpal Kaur has died on 20. 7. 2005 i. e. after about 8 months and 23 days of purchasing the insurance policy. It was pleaded that Amritpal Kaur had shown herself as minor in the proposal form which was also signed by her father Balbir Singh. As a matter of fact her date of birth was 10. 8. 1986 as per the school record and not 12. 6. 1989 which was filled by the respondents in the proposal form. Therefore, at the time of purchasing the insurance policy Amritpal Kaur had attained the age of majority while she had represented herself to be minor and had furnished false information. Therefore, the appellants were justified in repudiating the claim under Section 45 of the Insurance Act. The repudiation was legal and valid. Dismissal of the complaint was prayed. Balbir Singh respondent No. l proved his affidavit Ex. Cl. Respondents also proved documents Ex. C2 to Ex. C4. On the other hand, the appellants proved documents as Ex. R1 to Ex. R10. Affidavit of Hemant Buch, Marketing Manager of the appellants was proved as Ex. R11.

Learned District Forum considered the matter and accepted the complaint vide impugned order dated 20. 7. 2007 with costs of Rs. 2,000. Rs. 5,000 were awarded to the respondents as compensation. The appellants were directed to make the payment of Rs. 50,000 with interest at the rate of 9% per annum from the date of repudiation till the date of payment.

HENCE the appeal. Learned Counsel for the appellants submitted that the date of birth of Amritpal Kaur was 10. 8. 1986 and she was an adult at the time of filling of the proposal form on 15. 5. 2004. But in fact she had filled her date of birth as 12. 6. 1989 and represented herself to be minor. Learned Counsel for the appellants placed reliance on the judgment of the Hon''ble National Commission reported as LIC of India v. Smt. Minu Kalita, III (2002) CPJ 10 (NC) and submitted that when false information is given regarding health, age and income of the insured then the insurance contract is invalid, ab initio and repudiation is legal and valid. Reliance was also placed on the judgment of the Hon''ble Madhya Pradesh High Court reported as Smt. Rami Bai v. LIC of India, Bhopal, AIR 1981 MP 69.

THE appellants have proved the school leaving certificate of Amritpal Kaur as Ex. R6 in which her date of birth is shown as 10. 8. 1986. In the certificate from the Guru Nanak Public School, Sular Gharat, Sangrur proved on the record as Ex. R7 also the date of birth of Amritpal Kaur is shown as 10. 8. 1986. Hence it was submitted that since Amritpal Kaur had given wrong information in the proposal form about her date of birth and had represented herself to be minor while in fact she was adult, therefore, the insurance claim be rejected. On the other hand, learned Counsel for the respondents placed reliance on the judgment of Hon''ble Supreme Court reported as LIC of India and Others v. Smt. Asha Goel and Another, I (2001) SLT 89=air 2001 SC 549. Record has been perused. Submissions have been considered.

IN the judgment of Smt. Asha Goyal''s case (supra) relied upon by the learned Counsel for the respondents it was held by the Hon''ble Supreme Court that the concealment must be of material information and not of every information. It was held by the Hon''ble Supreme Court in the aforesaid judgment as under: "coming to the question of scope of repudiation of claim of the insured or nominee by the Corporation, the provisions of Section 45 of the Insurance Act is of relevance in the matter. The section provides, inter alia, that no policy of life insurance effected after the coming into force of this Act shall, after expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance 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 is suppressed facts which it was material to disclose. "

THE information about her date of birth and age was given by Amritpal Kaur in the proposal form as 12. 6. 1989 and she supported her version by the ration card which was issued to her father Baldev Singh on 1. 2. 2001 i. e. much prior to the filling of the proposal form. The proposal form has been proved as Ex. C3 and in column No. 4 of this proposal form it is specifically mentioned that the date of birth of Amritpal Kaur is 12. 6. 1989 and she was 15 years of age. The nature of proof furnished in support of her age was ration card to which specific reference was made in the proposal form. Therefore, the assured had taken her date of birth as 15 years on the date of filling of the proposal form placing reliance on the facts stated in the ration card. It was for the appellants to have asked the assured to furnish better proof regarding her date of birth particularly the school leaving certificate if they were doubtful about the correctness of the date of birth/age of Amritpal Kaur shown in the ration card. It was never asked for by the appellants. If the appellants had taken the date of birth of Amritpal Kaur as 12. 6. 1989 as furnished by her to be correct and accepted the proposal form, they cannot turn around now and challenge the correctness of the date of birth of Amritpal Kaur.

In this context, reference can be made to the judgment of the Hon''ble Calcutta High Court reported as Allianz Und Stuttgarter Life Insurance Bank Ltd. v. Hemanta Kumar Das, AIR 1938 Cal. 641 in which similar preposition had come up for consideration. It was observed as under: "it is to be borne in mind that this was an insurance by a man who admittedly was, at any rate, at the age of over forty-five years. He himself stated that he was fifty four. Therefore, the transaction came within the category of those proposals which require at the outset the furnishing by the proponents of proof of their age. Noot Behari Das was required to furnish proof of his age. He produced a horoscope. The horoscope was accepted by the company as being sufficient. Therefore, we may take that the company issued the policy upon the footing that they were insuring the life of a man whose age was fifty four. This is not a case where the proposer says that his age was fifty four and the Company merely accepted that statement at its face value and proceeded to issue a policy on that footing and subsequently, either shortly afterwards or a long time afterwards, admitted the age as stated in the policy in accordance with the provisions of Clause 9 (2) thereof. This was a case where the whole transaction from the very beginning proceeded upon the basis that the company had satisfied themselves that the proposer was of the age of fifty four and then issued the policy accordingly. In my view, therefore, the admission contained in the endorsement at page 3 of the policy is of such a character that the defendants when the policy matured could not be heard to say that the age of the insured was anything different from what he himself had stated it to be in February 1934. It is not necessary that one should apply in terms of the principle of estoppel, because that is merely a rule of evidence. In my view, this matter goes far deeper than that. The question of the age of the deceased was a definite and determining factor in the transaction from the very outset. "

THIS judgment of Hon''ble Calcutta High Court has been noticed by the Hon''ble Supreme Court in the judgment reported as P. C. Chacko and Anr. v. Chairman, Life Insurance Corporation of India and Ors. , III (2008) CPJ 78 (SC)=ix (2007) SLT 533=iv (2007) ACC 773 (SC)=iv (2007) CLT 229 (SC) although this judgment was held as not applicable in the facts of the case before the Hon''ble Supreme Court. Since the assured specifically mentioned in the proposal form that the date of birth of Amritpal Kaur was given from the ration card, therefore, it is clearly proved that she did not know that date of birth given by her was wrong or that she had furnished the wrong information with fraudulent intention. It is, therefore, held that Amritpal Kaur had given her date of birth with bona fide intention and she had relied upon the information as shown in the ration card. Since the school leaving certificate was not demanded by the appellants, now the appellants cannot place reliance on it and justify the repudiation of the insurance claim.

MOREOVER it has been held by the Hon''ble Supreme Court in the judgment reported as United India Insurance Company Limited v. Manubhai Dharmasinhbhai Gajera and Ors. , II (2008) CPJ 43 (SC)=v (2008) SLT 9=ii (2008) ACC 718 (SC) that the insurance companies are instrumentalities of the State within the meaning of Article 12 of the Constitution of India and it was held as under: "41. One important facet of the matter which must also be taken note of is duty on the part of a State to act fairly. Such a fair dealing is expected at the hands of a State within the meaning of Article 12 of the Constitution of India. Strong reliance has been placed by Mr. Parekh on the decision of this Court in Mahabir Auto Stores and Ors. v. Indian Oil Corporation and Ors. , (1990) 3 SCC 752 and Kumari Shrilekha Vidyarthi and Ors. v. State of U. P. and Ors. , (1991) 1 SCC 212. There cannot be any doubt whatsoever that Article 14 of the Constitution of India which encompasses within its fold, obligations on the part of the State to act fairly which operates also in the contractual field but the said principle would be applicable more in a case where bargaining power is unequal or where the contract is not a negotiated one and/or is based on the standard form contracts between unequals. Some of these decisions, however, had been taken into consideration in Asstt. Excise Commissioner v. Issac Peter, 1994 (4) SCC 104, whereupon strong reliance has been placed by the learned Solicitor General. "

Therefore, if the assured is legally bound to furnish correct information the Insurance Companies are also bound to act fairly and in larger public interest and not arbitrarily. In view of the discussion held above, there is no merit in the present appeal and the same is dismissed.

THE appellants had deposited an amount of Rs. 25,000 with this Commission at the time of filing of the appeal. This amount of Rs. 25,000 with interest accrued thereon, if any, be remitted by the Registry to the respondents by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants. Remaining amount shall be paid by the appellants to the respondents.

THE arguments were heard in this case on 21. 8. 2008 and the orders were reserved. Now, the order be communicated to the parties. The appeal could not be decided within the statutory period because of heavy pendency and non-availability of the requisite Benches and infrastructure in the State Commission, for which the State Government has already been requested. Appeal dismissed.