Life Insurance Corporation of India vs Ghanshyam Das

THIS is an appeal against the judgment and order passed on 3.12.1998 by District Consumer Forum, Shahjahanpur in Complaint Case No. 316/1997.

FACTS of the case, stated in brief, are as follows : Sri Ghanshyam Das, resident of Jalalabad, District Shahjahanpur, is the nominee and the husband of deceased Smt. Sushila Devi. The husband and wife had a joint life policy of Rs. 50,000/- which commenced from 28.1.1991. Last premium paid was on 27.4.1994. The deceased Smt. Sushila Devi had taken another personal life policy of Rs. 50,000/- and another joint policy in the name of husband and wife of Rs. 50,000/-. Both these policies commenced from 28.10.1992 and the premium continued to be paid till the death of complainant''s wife Smt. Sushila Devi. The last premium of these two policies was cleared on 3.6.1994. There was no interruption in the payment of premium in case of these policies and they continued to be in force.

On 30.7.1994 Smt. Sushila Devi died in S.G.P.G.I., Lucknow, information of which was given to opposite party No. 1. Necessary formalities were completed for payment of the claim of the three policies and a number of verbal requests were made to the opposite party.

CLAIM forms were given to the complainant by the opposite party on 14.3.1996 which were filled up and submitted to the opposite party alongwith other documents but the claim was not settled by LIC. At the time of submission of proposals for insurance of the three policies, correct replies were given by the insured. The doctor of the opposite party examined the complainant and his wife both and after satisfaction of the proposals insurance was accepted by opposite party but the claim was not settled by them and was repudiated on 31.3.1997 and 28.3.1997. For this deficiency in service, the complainant approached District Consumer Forum. Opposite party contested the case before the learned Forum and claimed that the complaint is not maintainable in the District Forum. As per the version of the opposite party, on investigation it was found that the deceased Smt. Sushila Devi was suffering from TB from the year 1989 and was also a patient of Asthama from the year 1992. In the proposal forms, wrong information was given and there was material suppression of the facts and the deceased obtained the insurance policies fraudulently and, therefore, the learned Forum is not the proper Court for settling such claims.

ALL facts informed in the proposal form of the policies were wrong, therefore, the contract was of no value and claim was repudiated. The District Consumer Forum after hearing both the parties ordered that LIC (opposite party) shall make payment of the amount of the policies alongwith benefits within a period of one month and also pay interest @ 12% per annum and thus the complaint was decreed. Aggrieved of this order of learned Forum, the opposite party has come up in the appeal.

IN the grounds of appeal, LIC has alleged that the Forum has no jurisdiction concerning the dispute about the insurance and the complainant is not entitled to convert the District Consumer Forum into Court of Ordinary Civil Jurisdiction for relief and such matters should go before a Civil Court. It has also alleged that direction for payment of money cannot be made by District Forum and, therefore, there was no cause for the learned Forum to proceed to settle the consumer dispute in the manner provided under Section 13(1), Sub-sections (c) to (g) of Consumer Protection Act.

THE denial of the full claim was made in good faith after consideration of the material available on record of the policies. Incorrect answers were given in the proposal forms and life insured was suffering from TB and Asthama since 1989. THE disease goes back prior to the date of proposal. Life insured got treatment from local doctor of Medical College and ultimately admitted to S.G.P.G.I. and died there. The risk coverage was obtained by practising fraud and, therefore, contract is void. The District Consumer Forum has committed an error of law observing no objections can be raised in the matter of policy which had covered two years which runs contrary to Section 45 of the Insurance Act, 1938. The section only puts a bar that no policy shall be called in question after expiry of two years from the date of the policy except on such facts which were material and proved on record as such. In short the onus lies on the Corporation, if it wants to challenge that policy after expiry of two years. It has to prove that there was a fraudulent concealment of a fact which was material for under-writing the risk. The District Forum has incorrectly observed that the certificates issued by Dr. Pooran Lal and Dr. R.P. Saxena were got forged by the appellant.

The life assured being a house lady was not entitled to have a policy jointly with husband for the risk coverage of more than Rs. 50,000/-.

THE income of the husband declared in the proposal was Rs. 36,000/- annually. THE total liability for payment of premium under the three policies was Rs. 12,576/-. THE family could not afford to finance the payment towards premium of the policies. The respondent even failed to submit the Claim Forms B and B-1 after getting them filled from S.G.P.G.I. Even the registration number of S.G.P.G.I. was not given by the complainant where the deceased admittedly died on 30.7.1994. Due to this bed head ticket could not be obtained by the Corporation and the Corporation was forced to take the decision on the basis of material available on record which material included the certificates issued by Dr. Pooran Lal and Dr. R.P. Saxena and other persons.

AN affidavit was filed by Sri Rajiv Kumar Sharma, Assistant Administrative Officer of the opposite party supporting the contents of the appeal. It was further stated in the affidavit that the deponent personally went to S.G.P.G.I. on 1.10.1999 to find the case history sheet/bed head ticket but these records had been taken out from the Record Room in 1996 and, therefore, he could not collect the facts from S.G.P.G.I. It was for this reason that Forms B and B-1, which the S.G.P.G.I., promised to give at a later date, were not given later on. Statement of Sri I.D. Mishra, Manager (Law) of the Corporation is also on record which supports the allegations contained in the memo of appeal. It was stated in the written statement of Sri I.D. Mishra that learned Forum relied upon the death certificate issued by S.G.P.G.I. It was brought on record by the complaint during its pendency. The original policy documents were also filed by the complainant before the Forum. The appellant asked the complainant time and again to procure Forms B and B-1 and submit the same duly filled by K.G. Medical College, Lucknow, and S.G.P.G.I., Lucknow, where the life assured was getting treatment. Once these forms are submitted, it would be easier for the Corporation to consider the claim afresh alongwith the information available on record. The proposal forms of the three policies alongwith copies of the policies were also enclosed with the statement of Sri I.D. Mishra of the Corporation alongwith other documents and correspondence, statement of witnesses and letters from the doctors, etc.

WE have gone through the evidence on record including all the papers on record submitted by the parties before the learned Forum. WE have also heard the arguments of the learned Counsels of both the parties.

THERE is no dispute between the parties for the three policies and payment of premium. THERE is also no dispute that the life assured expired on 30.7.1994. Arguments put forward by the learned Counsel for the appellant are that the life assured could not have taken the policies since she was a house-wife. The maximum coverage for her can be only Rs. 50,000/-. Also the financial position of the complainant was such that they could not have taken three policies. The death of life assured was informed to the Corporation after 8 months. Claim forms were to be filled up but this was not done so. Even the death certificate was not submitted before the Corporation and it was submitted only before the learned Forum. The learned Counsel further argued that under the circumstances of the case the only course left for the Corporation was to conduct an independent investigation. Report of the two doctors that the life assured was suffering from TB and Asthama and received treatment from Medical College, Lucknow, and S.G.P.G.I., Lucknow, was the basis for repudiation of the claim as the complainant did not cooperate in furnishing the relevant information. The main emphasis of the learned Counsel is on the facts that details of treatment and the information from Medical College, Lucknow, and S.G.P.G.I. were deliberately not given by the complainant. It has also been argued that in case the entire papers had been submitted by the complainant then the Corporation was prepared to review the whole matter and there was no deficiency of service on part of the Corporation.

A scrutiny of the proposal forms in respect of the three policies submitted by the complainant will go to show that in all the three forms, the doctor of the Corporation had verified that information given by the life assured was correct. The proposal forms were accepted by the Corporation and policies were issued. In the proposal forms, all the details of income etc. were given. The plea of the Corporation that the life assured was not entitled to the risk coverage beyond Rs. 50,000/- cannot be accepted in light of the fact that all three proposals were accepted by the Corporation and policies were issued. It was open to the Corporation not to have accepted the proposals at that stage. The Corporation accepted the proposals, issued the policies and they remained in force but when unfortunately the death occurred, then only the Corporation made a plea that the risk coverage was not acceptable.

IT is, therefore, not acceptable that the policies were obtained by the complainant in a fraudulent way. If the appellant had gone through the terms of the contract contained in the policies, then they should not have accepted the proposals for insurance from the side of the complainant. On the one hand LIC takes the premia without making any obejctions and later on repudiates the claim when it comes to making payment. Such unilateral action on the part of the Corporation goes against the interest of those who get insured and at the stage of submitting proposal no objection is raised by the Corporation. Now we come to the main point wherein case of the Corporation is that the complainant did not arrange to furnish the required information in respect of Forms B and B-1 and details of the treatment alongwith Registration No. etc. were not given to the Corporation with the result that they had to initiate an independent investigation which resulted in repudiation of the claim.

A careful examination of the proposal forms in respect of the three policies will go to show that doctors appointed by the Corporation verified the information given in the proposal forms. In the proposal forms fair answers were given to the questions in regard to the health of the life assured and then only the policies were issued for which premia were paid in time. The information that the life assured Smt. Sushila Devi died in S.G.P.G.I., Lucknow, on 30.7.1994 is the death certificate which is on record. The information of death was given by the complainant to the Corporation and the Corporation has admitted it in Para 13 of the written statement before the learned Forum. It appears that appellant did not take action on the request of the complainant primarily. Annexure ''G'' filed by the appellant is a request from the complainant to send required papers for settlement of the claim. Thereafter as per Annexure ''H'' the complainant was asked to submit claim forms. Correspondence was made with S.G.P.G.I., Lucknow, and Medical College, Lucknow, by the appellant on 15.3.1996. As per the version of the appellant, their officer himself went to S.G.P.G.I. to procure the documents in regard to the illness of the life assured. S.G.P.G.I., Lucknow, in response to the letter of the appellant wrote a letter with the remark that the registration number of the patient is required. If the Corporation cannot obtain record from S.G.P.G.I., then this is not understandable as to how the complainant could be able to get the papers in 1995 and 1996 when the death took place in S.G.P.G.I., Lucknow itself on 30.7.1994. A careful examination of the death certificate shows that the deceased was admitted in Endo Crinology Ward of the Institute. The disease shown is Graves Thyrotone Crisis and Mitral Regurgitation in Congestive Heart Failure and Reside Insomonia. This disease is not certainly directly or indirectly connected with TB or Asthama. The patient was treated in Endo Crinology Ward which does not treat the patients of TB and Asthama.

THE appellent''s case is that their own investigation could not find that the life assured was suffering from TB and Asthama. Reliance has been put on the reports of the doctors (Pages 40 and 57). THE report of the doctor at Page 41 is vague and the doctor has certified that life assured was a patient of Blood Pressure for the last one year. THE certificate is dated 12.3.1996 issued by Dr. R.P. Saxena, R.M.P. THE certificate no where mentions TB or Asthama. THE doctor does not appear to be a competent one and it looks that the certificate has been issued by a semi-educated doctor. Similar is the case of certificate issued by Dr. Pooran Lal. As per the certificate, he informs that from 1992 the deceased was suffering from Asthama and was being treated in Medical College, Lucknow, and ultimately in S.G.P.G.I., Lucknow, where the death occurred on 30.7.1994. Affidavits of these two doctors have not been produced. Both are R.M.P. doctors. THEy have given certificates for the completion of the formality required in the process of so-called investigation by opposite party and no affidavits have been filed by the respective doctor. We are, therefore, inclined to agree with the opinion of the District Consumer Forum, Shahjahanpur, that these two certificates have no value.

IN view of the above discussions, we find no reason to interfere with the judgment and order of the District Consumer Forum, Shahjahanpur, and the appeal is thus liable to be dismissed. Order The appeal is dismissed with costs of Rs. 2,000/- and the judgment and order dated 3.12.1998 of the District Consumer Forum, Shahjahanpur, are confirmed.

Compliance of the order be made within two months from the date of issue of this order.

LET copies be issued as per rules. Appeal dismissed with costs.