Life Insurance Corporation of India vs MAGANLAL NAVALCHAND CHAVALA

THIS appeal arises from order dated 8th September, 2004 rendered by the learned Ahmedabad District (Rural) Consumer Disputes Redressal Forum in Complaint No. 1106/1997 directing the opponent Life Insurance Corporation of India (LIC for short) to pay to the complainant Rs. 1,00,000 being the last policy amount taken by the complainant''s deceased father, with interest @ 9% p.a. from the date of complaint till payment and compensation and cost respectively in the sum of Rs. 2,500 and Rs. 1,500.

RESPONDENT, that is to say, the original complainant had been served with the notice of this appeal. No one has appeared for the complainant. We have gone through the impugned order. We have heard the learned Advocate appearing for the appellant LIC. It would appear that the complainant''s father, since deceased, Navalchand Madhavlal Chavala had taken life insurance as per policy No. 832746594 on 28.7.1993 by paying premium of Rs. 7,699 and got himself insured for the sum of Rs. 1,00,000. The complainant was shown as the nominee in the said policy of insurance. According to the say of the complainant deceased insured had taken five different policies and before taking the policies the opponent''s panel doctor examined the insured and after getting report about his health the aforesaid five policies were issued. The deceased was also examined by Dr. Moti N. Jagwani who happened to be the family doctor and he had given certificate dated 24.6.1996. Prior to his death (on 20.10.1995) the insured was admitted to Civil Hospital in its Kidney Department, on account of adverse physical health. Upon examination of the insured it was found that he did not have kidney trouble but there was suspicion with regard to the deceased insured suffering from cancer. He was, therefore, admitted as indoor patient in cancer hospital and during his treatment he died at around 3 o''clock in the afternoon on 20.10.1995. The cause of death was heart attack. Under such circumstances complainant alleged that the repudiation dated 14th June, 1996 communicated by the opponent LIC to the complainant would amount to deficiency in service.

The opponent LIC resisted the complaint inter alia on the ground that when the insured had taken the 5th policy in the year 1992 his E.C.G. report was taken and on account of finding of the E.C.G. report extra premium was charged from him. The insured suppressed the fact with regard to taking of 5th policy by making payment of extra premium when he had submitted the proposal form on 30.11.1993 for the policy of insurance in question. Thus the insured suppressed the said material fact at the time of taking of insurance in question from the opponent LIC.

LEARNED Forum came to the conclusion that the insured declared the facts with regard to he having taken all the prior policies of insurance. Besides, the insured was medically examined and extra premium was paid. LEARNED Forum, therefore, came to the conclusion that the insured did not suppress any fact with regard to his prior illness and even if it is assumed that he suppressed the fact with regard to he having taken the 5th policy by making payment of extra premium that would not amount to suppression of material fact. We cannot endorse the conclusion so rendered by the learned Forum as it is contrary to the record. As a matter of fact it is admitted by the complainant, and for that matter by the insured, since deceased, that the fifth policy had been taken by him by making payment of extra premium and that fact was not stated in the proposal form for the policy of insurance in question. It was an admitted fact that extra premium was charged because in the E.C.G. report of the insured it was noticed that he was suffering from mild enlargement of heart. Thus the insured knew very well that he was suffering from a serious ailment. It can be presumed that he had apprehension that the 6th policy of insurance might not be issued by the opponent LIC if he disclosed the fact with regard to he having taken fifth policy by making payment of extra premium in which case the opponent LIC would be posted with immediate knowledge about the fact that the insured was suffering from mild enlargement of the heart. In our considered opinion the circumstances which flow from these admitted facts are: (1) The insured had taken fifth policy of insurance when during his medical examination he was required to take E.C.G. report and that E.C.G. report disclosed that he was suffering from mild enlargement of heart and that happened in the year 1992. (2) Soon thereafter in the year 1993 he had the occasion to take 6th policy of insurance, that is to say the policy of insurance in question, where he did not disclose the aforesaid last mentioned policy taken by him by making extra premium. (3) Admittedly in the year 1992 he was found to be suffering from mild enlargement of heart. (4) Policy in question was issued on 22.2.1994. (5) Without two years from the date of proposal as also from the date of policy the insured died on 20.10.1995.

Under the aforesaid circumstances it would clearly indicate the state of mind of the deceased in taking the policy in question by suppressing material fact with regard to fifth policy of insurance taken by him on making payment of extra premium on account of the fact that he was suffering from mild enlargement of heart. Thus it was established on the record of the case before the learned Forum that the deceased insured intentionally suppressed the material fact that he obtained 5th policy of insurance in question by making payment of enhanced premium on account of E.C.G. report disclosing mild enlargement of heart.

IN above view of the matter the opponent LIC was justified in repudiating the claim of the policy of insurance in question after having made payments of the previous policies. Hence, bearing in mind the facts of the case following order is passed: Impugned order dated 8th September, 2004 rendered by the learned Ahmedabad District (Rural) Consumer Disputes Redressal Forum in Complaint No. 1106/1997 is hereby set aside and Complaint Bearing No. 1106/1997 will stand dismissed. This appeal is accordingly allowed with no order as to cost throughout. The amount of Rs. 25,000 stated to have been deposited by the appellant LIC (original opponent) in this Commission shall be refunded back with interest, if any, by A/c payee cheque, after due verification, to the appellant LIC. A true copy of this order be sent to the complainant (respondent herein) for which direct service is permitted to the opponent LIC (appellant herein). Appeal allowed.