Life Insurance Corporation of India vs MANJU SHARMA

THIS is an appeal against the judgment and order dated 15.5.2001 passed by District Consumer Forum, Bulandshahr in Complaint Case No. 615 of 1996.

THE facts of the case stated in brief are that the complainant''s husband Sri Prabhat Kumar Sharma had taken three life policies from the Life Insurance Corporation of India. All the three policies were for a sum of Rs. 1,00,000/- each. THE first policy was taken on 21.12.1976; the second policy was taken on 28.11.1988 and the third one was taken on 24.2.1991. According to the complainant her husband Sri Prabhat Kumar Sharma died on 2.11.1992 in Sir Gangaram Hospital, New Delhi, on account of failure of kidney. THE complainant is the nominee. THE complainant''s husband was posted as Additional District Judge at the time of his death. THE premiums were paid on all the policies till his death. THE Life Insurance Corporation has paid the amount due under the first and second policies taken on 21.12.1976 and 28.11.1988 but it refused to pay the amount of the policy taken on 24.2.1991 on the ground that the complainant had suppressed material facts about his health. It is further alleged that on the policy the agent got the signature of Sri Prabhat Kumar Sharma done while the policy was not filed by him but was done by the agent. The complainant had submitted the claim form and other papers which were demanded by the Life Insurance Corporation.

According to the complainant no material fact was suppressed by the policy holder in the proposal form. It is alleged by the opposite party that the policy was non-medical. It is also alleged that the proposal form was clearly understood by the insured and after understanding the same he has signed the form. The amount of first two policies have been paid.

ACCORDING to the opposite party, Life Insurance Corporation, question No. 20 and 21 had been answered in ''yes'' but the same on enquiry was found to be false. The insured had taken 28 days medical leave from 2.2.1987 to 20.4.1987 and from 23.11.1989 to 29.11.1989. The complainant remained admitted in Aligarh Hospital for ventricular trachycardia disease. These facts were suppressed by the policy holder in the proposal form. Under Section 45 of the Insurance Act if the death takes place within two years of taking the policy and there are wrong disclosure of facts or non-disclosure of material facts, then the policy will become defective. The third policy has been repudiated by letter dated 18.5.1994. The parties led evidence before the learned District Consumer Forum, who after hearing both the parties, came to the conclusion that the insured had not suppressed any material fact and also held that there was deficiency on behalf of the Insurance Corporation. It, therefore, directed the Insurance Company to pay a sum of Rs. 1,00,000/- within a period of 30 days to the complainant along with interest at the rate of 12% per annum with effect from 2.11.1992. It was further directed that if the amount is not paid within the time mentioned above, then interest shall be payable at the rate of 15% per annum. A sum of Rs. 5,000/- as compensation and a sum of Rs. 3,000/- as cost were also awarded.

AGGRIEVED against the order of the learned District Forum, the opposite party, Life Insurance Corporation, has come in appeal and has challenged the correctness of the order of the District Forum. We have heard the learned Counsel for the appellant without issuing notice to the opposite party. The only question in this case is whether there was any material suppression of fact by the insured at the time of filling up of the proposal form or at the time of issuing policy. The case of the opposite party is that the insured had taken 78 days medical leave from 2.2.1987 to 20.4.1987 on account of heart disease and the policy holder remained admitted in the Aligarh Hospital from 23.11.1989 to 29.11.1989. A perusal of the file will go to show that there is no paper on record to show that the policy holder had taken medical leave of 78 days on account of his illness. Copy of letter dated 7.10.1988 written by the Registrar of the Hon''ble High Court to the District Judge, Bulandshahr is on record. A perusal of it goes to show that the leave on medical ground was taken by the insured on account of illness of his daughter and not on account of his illness. There is no other document on record to show that the insured was on leave for 78 days in the year 1988 as alleged by the opposite party/appellant. The next paper which has been filed by the Insurance Corporation is the certificate of hospital treatment. In it, it has been written that the insured was suffering from heart disease. The patient told that he is suffering from last three months. This certificate is dated 21.12.1992. This goes to show that he is suffering from this disease since October, 1992. In column No. 7 at serial No. 1 it says that alcoholic liver disease was diagnosed in 1992 in the patient. When the insured had for the first time observed the disease in 1992 how could he have disclosed the disease on 14.2.1991 when he took the policy. The insured did not know about the disease and he cannot be said to have suppressed the material fact. The suppression could only be where a fact is known to a particular person. When a fact is not known to that person how could he be said that the fact has been suppressed. Thus the argument of the learned Counsel for the appellant that the insured has suppressed the facts about his illness is not supported by any evidence on record. The ground which has been taken by the Life Insurance Corporation of India to repudiate the claim of the insured is not tenable and the learned District Forum in its judgment has clearly held that the deficiency is on the part of the Life Insurance Corporation. The learned District Consumer Forum has also rightly placed reliance on the decision of the Hon''ble High Court in the case LIC of India v. Asha Goyal, I (2001) SLT 89=AIR 2001 Supreme Court 549. Thus we find that the appeal has no force and the same is liable to be dismissed. ORDER The appeal is dismissed and the judgment and order of the learned District Forum are confirmed. There will be no order as to the costs. Let compliance of the order of the learned District Forum be made within a period of two months from today. Let copy as per rules be made available to the parties. Appeal dismissed.