Life Insurance Corporation of India vs NIRMALA JAISWAL

THIS appeal, under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 25.9.2002 by the District Consumer Disputes Redressal Forum, Bilaspur (hereinafter called the ''District Forum'' for short) in Case No. 22/2002, directing payment of Rs. 50,000/- with interest, to the complainant/respondent.

THE relevant facts not in dispute stated in brief are, that Shri Raghunath Jaiswal had obtained a policy on his life for an assured sum of Rs. 50,000/- on 18.12.1994. THE said policy was for a period of 20 years. THE half-yearly premium of Rs. 1,879/- was payable on the said policy. However, though the premium was regularly paid till June, 1997 but thereafter there was default in payment of half-yearly premium, hence the policy lapsed. THEreafter, the policy was got revived by the deceased in December, 1999, after submitting prescribed forms, including the statement regarding his health on 22.12.1999 and after paying the amount of previous unpaid premia with late fee etc. THE deceased died on 1.3.2000 i.e. within about 3 months after the revival of policy, due to heart failure. THE complainant/respondent No. 1 was the nominee under the said policy. She laid claim with the Insurance Company for payment of the assured amount under the policy. THE claim as above was however, repudiated by the Insurance Company, by its letter dated 26.3.2001. The grievance of the complainant/respondent as averred in the complaint was that despite revival of the policy and payment of the previous premia with late fees, the amount assured under the policy was not paid by the insurer to her, which amounts to deficiency in service on the part of the opposite party/appellant. She prayed that the sum assured under the said policy be directed to be paid to her.

The complaint was resisted by the insurer appellant. The submission of insurer appellant was that there was material suppression of facts by the deceased Raghunath Jaiswal. It was averred in the above context that the deceased had met with an accident and had fallen down from motor cycle on 13.6.1999. There was fracture of femer bone of the deceased insured. The insured Raghunath Jaiswal received treatment for the injuries sustained in the said accident. Operation was also performed. However, the above facts were suppressed by the insured deceased in the statement furnished by him to secure revival of the policy.

THE learned District Forum found that there was no material suppression of facts by the deceased and that the injuries including the fracture sustained due to the accident, and the treatment thereof had no connection whatsoever, with the cause of death of the deceased. It was, therefore, held by the learned District Forum that the complainant/respondent No. 1 was entitled to get the sum assured from the appellant insurer. THE appellant was, therefore, directed to pay the assured amount of the policy with interest thereon to the complainant/respondent. The learned Counsel for appellant assailed the order of District Forum. It was urged that the agreement for revival of the policy was based on good faith. The appellant furnished declaration of his health in which he omitted to mention that the deceased sustained injuries in the accident and received treatment and was also operated upon. Thus, there was suppression of material facts amounting to breach of good faith by the deceased. It was, therefore, submitted that the appellant insurer was justified in repudiating the claim under the revived policy and that the complainant/respondent No. 1, the nominee of the life assured, was not entitled to receive the sum assured under the said policy.

HOWEVER, the learned Counsel for the complainant/respondent No. 1 supported the impugned order and submitted that the cause of death of the insured was due to heart failure, which had no nexus with the injuries sustained by the insured in the motor cycle accident, and the treatment received by him, in connection therewith. It was, therefore, submitted that there was no material suppression of facts and the learned District Forum was justified in awarding the amount payable to her under the said policy. The only question that requires consideration in this appeal is as to whether there was any material suppression of facts by the deceased which could justify repudiation of the policy by the appellant insurer. As noticed earlier, it is not in dispute that the deceased in the statement of his health furnished by him at the time of revival of the policy on 18.12.1999, declared that he was not suffering from any disease nor had he sustained any injury or received any treatment. However, from the material placed on record it appears that the deceased has sustained a fracture on right femer on 13.6.1999 and he was operated upon on account of facture of the femer bone on 18.6.1999. It is also not in dispute that he died on 1.3.2000 due to heart failure. It may be noticed that the cause of death as above had no ostensible nexus with the injuries and fracture sustained in the said accident and treatment given to him there for. Therefore, even though the fact of the said accident or injury was not disclosed in the declaration of health submitted by the deceased at the time of revival of the policy, the same would not amount to suppression of material facts, so as to vitiate the agreement of insurance.

ACCORDINGLY, the learned District Forum was justified in taking the view that there was no suppression of material facts by the deceased at the time of revival of policy. The said finding is affirmed. ACCORDINGLY, no interference in the impugned order is called for.

THE appeal has no substance and is consequently dismissed. THE appellant shall bear its own cost and shall also pay the cost of the respondent which is quantified at Rs. 1,000/- (one thousand) only. Appeal dismissed.