LIFE INSURANCE CORPORATION OF INDIA vs Gurbaz Singh

THIS is an appeal by the Insurance Company against the judgment and order of the District Forum dated 8.4.2003 by which the complaint of the complainant was allowed in the following terms: ''9. In view of the above discussion we are of the considered view that the complainant proved his case and thus we accept the complaint with direction to opposite parties to pay death claim under policy No. S 130113236 purchased by Gurdev Kaur along with interest @ 12% P.A. from the date of maturity till its realization. We further direct the opposite parties to pay Rs. 5,000 as cosolidated compensation for mental tension and harassment and litigation expenses. The above directions be complied with within one month from the date of receipt of copy of order. Copy of order be sent to the parties free of cost. File be consigned to records.''

BRIEF facts giving rise to this appeal may be noticed: Mrs. Gurdev Kaur mother of the complainant had taken a life insurance policy from the Life Insurance Corporation of India (appellant) (in short ''LIC'') in the sum of Rs. 50,000. The insurance commenced on 15th of June, 1999. Gurdev Kaur died on 26th of August 2001. Claim was lodged by the complainant with the LIC for the payment of the insurance amount. However, the LIC repudiated the claim vide letter dated 31st of March 2002/25th of April, 2002. The repudiation letter Ex. C -2 reads as under: ''Life Insurance Corporation of India Ref. Claims/DCR/80 -02 Regd. A.D. 31.3.2002/25.4.2002 Shri. Gurbaz Singh, S/o Smt. Gurdev Kaur, W/o Sh. Balwant Singh, Gali No. 1, Deep Nagar, Kotkapura Road, Distt. Muktsar. Dear Sir, Re: Repudiated Death Claim u/policy No. S/130113236 fvg. Smt. Gurdev Kaur (Decd). With reference to your claim under the above policy on the life of your deceased mother, we have to inform you that we have decided to repudiate all liability under the policy on account of deceased having withheld correct information regarding her health at the time of effecting the assurance with us. In this connection, we have to inform you that in the proposal for assurance dated 15th June, 1999/Personal Statement signed by the deceased assured on 15th June, 1999 she had answered the following questions as under noted: Questions Answers 11. (a) During the last 5 years did you consult a medical practitioner for any ailment requiring treatment for more than a week? No. (b) Have you ever been admitted to any hospital or nursing home for general check -up, observation treatment or operation? No. (c) Have you remained absent from place of work on grounds of health during the last 5 years? No. (e) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? No. (i) What has been your usual state of health? Good. We may, however, stated that all these answers were false as we hold indisputable proof to show that she had been suffering from non -insulin dependent Diabetes Mellitus with Diabetic nephropathy some years before the proposal date. She did not, however, disclose these facts in her proposal papers. Instead she gave false answers therein as stated above. It is, therefore, evident that she had made incorrect statement and withheld correct information from us regarding her health at the time of effecting the assurance and hence in terms of policy contract and the declarations contained in the forms of proposal for assurance and personal statement, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belong to us. In case you are not satisfied with our above decision and feel that we have not considered any particular fact and circumstances in support of your claim, you may send your representation within a month for re -consideration of your claim to our Zonal Office at the following address - The Zonal Manager, LIC of India, Northern Zonal Office, Jeevan Bharti Bldg. 124, Connaught Circus, New Delhi - 110 001. Yours faithfully, Encl : One Leaflet. Sd/ - Sr. Divisional Manager.'' This led the complainant to file a complaint before the District Forum which allowed the complaint as aforesaid.

THE argument of the appellants before the District Forum as opposite parties and before us is that during the investigation of the claim of the complainant it was gathered from the employer of the deceased i.e., Punjab State Electricity Board that the deceased had remained on sick leave (medical ground) from 8th February, 1994 to 4th of March, 1994, 17th of March, 1994 to 20th of May, 1994, 12th of September 1994 to 30th of September, 1994, 1st of July 1999 to 20th of July, 1999 and 23rd of April, 2001 to 21st of May, 2001. It was further mentioned by the employer that the deceased had not availed of any sick leave from the period 1995 to 1998. According to the appellants, this information was withheld while answering the questionnaire to which reference has been made in the repudiation letter. According to the Counsel, the reply to the question was intentionally wrongly given. To mislead the LIC, the answers were, according to the Counsel, false to the knowledge of the deceased. It was further argued that when the LIC got the matter investigated in transpired from the hospital record where the deceased was admitted on 24th of April, 2001 and discharged on 20th of August, 2001 that she was admitted in the hospital because of cancer in the breast. To the question as to what was the diagnosis when the patient arrived at the hospital, it has been mentioned that ''septicemia, renal failure, discharge from wound, NIDDM (Non -insulin dependent diagnosis management), diabetic nephrology''. The patient was operated for breast cancer in April 2001. She again came back to the hospital on 17th of August, 2001 with complaints of discharge from wound and sed urine output. The patient was managed conservatively and dialysis was done. The patient was discharged on request on 20.8.2001. From this medical history, learned Counsel for the appellants argued that the deceased was a patient of diabetes as it was a case of renal failure which would not have occurred overnight. It has to be a result of long drawn disease of diabetes.

THE first question to be answered is : Was the information provided by the deceased wrong or there was any material withholding of facts or wrong mentioning of facts in the questionnaire? There is nothing on the record to show that answer to question 11(b) that in fact prior to taking of the policy the deceased had been admitted to any hospital or nursing home for treatment or operation. Simply because the complainant took some medical leave in the year 1994 would not lead us to the conclusion that she ever got herself admitted in a hospital or in a nursing home for any treatment of disease. Medical leave can be taken on various grounds. The policy was taken in June 1999. Prior thereto 5 years will take us to June 1994. From the chart now given it will be seen that she took leave from 12th of September, 1994 to 30th of September, 1994 i.e., for about 18/19 days. That may be the period which may come within five years in 1999. Perhaps it is not even possible to remember as to when about 5 years back medical leave was taken from the employer. This slight omission cannot be said to be material when answer to question 11(c) was given. Next question 11(e) was if she was suffering from diabetes, etc. to which she replied No. There was nothing wrong with her in 1999. She could not be said to be suffering from diabetes. Reason is that from 1994 to 1999 there is nothing on the record that she took any leave from her department and secondly there is also nothing on the record to show that she ever got treatment for diabetes during that period. Further in the medical report of 2001, it is mentioned that she was a case of NIDDM; meaning thereby that she was not taking any insulin injections. There is nothing on the record of the hospital also to show as to since when she was suffering from diabetes and what was its extent and whether the renal failure was because of the alleged long drawn disease of diabetes. In these circumstances, we are of the view that the repudiation of the claim was not well based as there was no withholding of any material facts or any wrong answer which will materially affect the contract. Before we part with this judgment we may also refer to Section 45 of the Insurance Act, 1938 which is in the following terms: ''45. Policy not to be called in question on ground of misstatement after two years. -No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the 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 it suppressed facts which it was material to disclose]: [Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.]'' Admittedly, the death had taken place after more than 2 years of the taking of the policy. The policy was taken in June 1998 whereas the death was in August 2001. To get out of the limit of two years as envisaged by Section 45 of the Act the LIC must show that the alleged wrong statement was on material matters or that the material facts have been suppressed which material was supposed to be disclosed by the deceased and that the same was fraudulently done. There must be some evidence factual or circumstantial to indicate fraud on the part of the deceased insured. There is no such plea or evidence forthcoming to come to a conclusion that any fraud had been played by the deceased.

FOR the foregoing reasons, we do not find that the approach of the District Forum was in any way wrong when it allowed the complaint. Finding no merit in this appeal the same is hereby dismissed. We make no order as to costs.

THE amount deposited by the appellants while filing the appeal may be remitted to the respondent by way of crossed bank draft/cheque after 45 days and the balance amount be also remitted by the appellants to the respondent. Appeal dismissed. - - - - - - - - - - - - - -