Life Insurance Corporation of India vs KAMLA KAPOOR

THE only question involved in this appeal is about the validity of the repudiation of the claim made by the appellant-Life Insurance Corporation. THE District Forum held the repudiation to be illegal and directed the appellant to pay Rs. 1 lakh alongwith 18% per annum interest from 1.10.1994 to the complainant, Smt. Kamla Kapoor on account of death of her husband Kamal Kumar Kapoor whose life was insured by the appellant Corporation. THE repudiation was made on the ground that the deceased at the time of taking the LIC policy or at the time of its revival concealed material facts relating to his health. THE policy was issued on 28.3.1990 for a sum of Rs. 1 lakh insuring life of Kamal Kumar Kapoor. In 1991, the policy lapsed but it was revived on l2.12.1991. Kamal Kumar Kapoor died on 13.8.1994 while he was admitted in R.S.D. Hospital. On 27.8.1994 claim was made before the LIC by the complainant. THE claim was repudiated on 1.10.1994 and subsequently again on 24.10.1994. Hence the complaint was filed by Smt. Kamla Kapoor alleging that the deceased was never suffering from any illness at the time of taking the policy. On the other hand, the Corporation while contesting the complaint, pleaded that on material collected from the hospital, it transpired that the deceased was a known case of diabetes mellitis for the last 7/8 years. He concealed this fact while submitting the proposal from as well as at the time of revival of the policy. THE Corporation repudiated the claim after getting the matter investigated and hence there was no deficiency in rendering service.

LEARNED Counsel for the Corporationappellant has argued on the basis of observation of the Supreme Court in Life Insurance Corporation of India v. Smt. G.M. Channabasemma, AIR 1991 SC 392. In the facts of that case, the deceased had concealed material facts regarding his health at the time of taking the policy. The Hon''ble Supreme Court observed on the subject of taking LIC policy and that of confidence of the parties. It observed in para 7 of the judgment as under : "It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding, whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted."

As far as ratio of the decision aforesaid is concerned, no dispute is being raised on behalf of the respondent-complainant. However, it is stated that in the facts and circumstances of the present case, no material fact was concealed rather diabetes as such was not such a disease which was required to be disclosed. Admittedly, the complainant lived for more than four years after taking the policy and 2-3/4 years even after revival of the policy. Some of the judgments have been relied upon by the Counsel for the appellant which deserve to be noticed and they are otherwise distinguishable on facts. In Marketing Manager, LIC of India v. Smt. S. Vijaya, I (1995) CPJ 122 (NC), the deceased as per history sheet was suffering from Cirrhosis of Liver and was a chronic alcoholic for about 10 years and had suffered three attacks of jaundice. In Divisional Manager, LIC of India & Ors. v. Sunita Sharma, I (1994) CPJ 3 (NC), the Insurance Policy was taken on 20.3.1988 by Hari Om Sharma who died on 29.8.1988. He was suffering from mitral stanosis for about 17 years, from breathlessness for 7 years. He had also undergone an operation of appendicitis about 9 months prior to the Insurance Policy and was on medical leave from 8.6.1987 to 1.7.1987. The ratio of these decisions cannot be applied to the case in hand. The present case is fully covered by the decision of the National Commission in 1996 (3) CPR 229. In that case also, the illness of diabetes was not disclosed at the time of taking the Insurance Policy which was not co-related with the cause of the death which occurred after few years of taking of the policy. The repudiation of the claim by the Corporation was held to be illegal and the complainant was allowed the insured amount. The cause of death in the present case is cardiac arrest as is shown in Annexure A4. The first attack was on 3.8.1994 at 7 a.m. and the patient became stable thereafter, on the same day again at 9.10 a.m. there was another attack of severe pain in the chest followed by cardiac arrest and respiratory arrest. The history of the patient was re corded by the patient as well as his wife as stated therein. The patient was a known case of diabetes mellitis and was getting treatment as OPD patient from that very hospital. It may be observed that mellitis nature of diabetes is only one form of disease and it does not indicate magnanimity of the disease. As already stated above, after taking policy, Mr. Kapoor lived for about 4 years. At the time of taking the policy. Mr. Kapoor was medically examined by the Doctor of the LIC. It may be observed that repudiation has to be bona fide applying independent mind on the material collected. The object of the repudiation is to avoid fraud being committed on the Corporation by the persons getting their lives insured knowing of the serious illness existing and expecting death in near future. Present is not such a case as Mr. Kapoor had lived for about 4 years after taking the policy without suffering any illness of any organ of the body as such. Since no material in this respect was collected or brought on the record, it has not been established by the Corporation that the existence of the disease of diabetes even for years together had any corelation with the cause of death of Mr. Kapoor. No evidence in this respect was either collected by the Corporation or produced before the District Forum. Thus in the circumstances of the case, the District Forum was right in coming to the conclusion that the repudiation was illegal. The Haryana State Commission in First Appeal No. 840 of 1996 Life Insurance Corporation of India through Senior Divisional Manager, Chandigarh v. Smt. Rampati wd/o Sh. Kartar Singh Malik, House No. 588/19, Advocate Colony, Hansi, District Hissar decided on 14.3.1997 observed that diabeties was not such a serious ailment which was necessary for the insured to bring it to the notice of the Corporation at the time of taking the policy. For the reasons recorded above, we find no merit in this appeal and dismiss the same with costs which are assessed as Rs. 1,000/-. Appeal dismissed with costs.