Life Insurance Corporation of India vs RADHIKA MADHARIYA

THIS instant appeal has been filed under Section 15 of the Consumer Protection Act, 1986, against the order dated 12.9.2002, passed in Complaint No. 106/2001 by the District Consumer Disputes Redressal Forum, Durg (hereinafter called the ''District Forum'' for short) whereby the complaint for deficiency in service against the L.I.C. was allowed and the opposite party was directed to pay to the complainant the insured sum of Rs. 25,000/- together with interest @ 9% per annum besides paying Rs. 700/- towards cost of proceedings and Rs. 300/- towards Counsel''s fee.

THE facts not presently in dispute are that the husband of the complainant late Sevak Ram Madhariya had obtained a life insurance policy bearing No. 381594728 on 28.1.1997 for a sum of Rs. 25,000/- from the appellant/opposite party. THE said Sevak Ram Madhariya had appointed his wife i.e., the respondent/complainant as his nominee for purposes of the aforesaid policy. It is also not in dispute that the said Sevak Ram Madhariya died on 30/31.1.1998 and further that the claim filed by the nominee of the deceased i.e., the respondent/complainant was repudiated by the insurer on 31.8.1999 on the ground that while filling proposal form the life assured had suppressed material facts regarding his state of health. In consequence of repudiation of claim, the widow of the life assured had filed complaint before the District Forum and contended that at the time of filling the proposal form her husband was hale and hearty and leading an active life. Before issuance of policy the duly authorised doctor of the LIC had medically examined her husband and as he was found in perfect condition of health, first premium was accepted and policy was issued. It was further contended that subsequent to obtaining the policy, there was sudden deterioration in health of the life assured and consequently he died on the night intervening between 30 and 31 January, 98. It was further averred that the insurer has wrongly repudiated her claim under the garb of suppression of material facts regarding the state of health of her husband at the time of filling proposal form. The complainant had claimed the insured sum of Rs. 25,000/- together with interest @ 18% per annum and Rs. 10,000/- as damages together with interest @ 18% per annum and cost of proceedings. The complainant had filed her own affidavit in support of the averments contained in the complaint.

The appellant/opposite party insurer had averred in the written version that the policy holder had given wrong information regarding state of health while filling the proposal from and had suppressed the fact that he was suffering from various diseases from the period prior to obtaining insurance policy and had taken leave from his place of work as detailed in the written version. It had also been averred that the fact that a person is examined by the L.I.C.''s medical examiner does not absolve the proposer from his responsibility to disclose the material facts. It has also been averred that as the death was within a short period after obtaining the insurance policy, the L.I.C. had conducted thorough investigation and obtained leave record of the policy holder from his employer together with medical certificate submitted by him with the employer. The policy holder had suppressed all these facts at the time of filling proposal form. Further that it is also clear from the post-mortem report that the policy holder suffered from tuberculosis, etc. Hence, the claim was repudiated bona fide and by doing so the company has not committed any deficiency in service.

THE learned Distt. Forum passed a detailed order and came to the conclusion that the L.I.C. has failed to substantiate its version that the policy holder had suppressed the fact of his illness while filling the proposal form, hence repudiation of claim by the L.I.C. amounted to deficiency in service. Consequently, the complaint was allowed. Aggrieved by the aforesaid order the opposite party insurers have preferred this appeal. The learned Counsel for the appellant assailed the impugned order and urged that the learned Distt. Forum failed to appreciate the material on record in its proper perspective. The learned Counsel for the appellant also argued that the learned Distt. Forum erred in not holding that the policy holder had suppressed the fact of his illness while filling the proposal form. The learned Distt. Forum has failed to place due reliance on the documents filed by the insurer, though the same relate to the period prior to filling of the proposal form. The insurer had repudiated the claim after proper application of mind and there was no deficiency in service in repudiating the claim. The learned Counsel for the appellant, therefore, prayed that the appeal may be allowed and the order of learned Distt. Forum be set aside.

AS against this, the learned Counsel for respondent supported the impugned order and submited that it is a reasoned order and is just and proper. There was no suppression of material facts by the life assured. He further submitted that there is no need for any interference with the order as passed by the Distt. Forum. The question to be decided is: whether the repudiation of claim by the insurer on the sole ground of suppression of material facts by the life assured was bona fide? Heard learned Counsels for both the parties and perused the record. During arguments learned Counsel for the appellants drew our attention to column No. 11 of the proposal form dated 28.2.1997. The said column relates to personal history and it was pointed out that all the questions relating to illness and treatment thereof, admission to hospital etc. have been answered in negative. The appellant/insurer also obtained from the employer of the policy holder, the record of leave availed by the life assured from time-to-time and filed the same before the Distt. Forum. The insurer has also filed photocopies of various medical certificates allegedly submitted by the policy holder with its employer. Different diseases have been mentioned in different medical certificates. Mainly on the strength of the documents referred hereinabove, the learned Counsel for the respondent tried to convince us that there was suppression of material facts and further that the repudiation was bona fide.

UNDOUBTEDLY, the burden to prove that the death of life assured was due to the disease that existed at the time of filling the proposal form and that too, to the knowledge of the person filling the form, lies heavily on the insurer. The appellant insurer has just filed photocopies of the alleged medical certificates but has failed to file the original documents. Affidavits of the doctors who are said to have given the said certificates have also not been filed. As rightly held by the Distt. Forum, such documents cannot be relied and on sole strength of the same it cannot be said that the life assured had made false statement regarding his condition of health at the time of filling the proposal form.

WE have also observed that prior to issuance of policy Shri Sewak Ram Madhariya was examined by L.I.C.''s Medical Examiner and the Medical Examiner''s Report is also placed on record of the Distt. Forum. Column 4 of the said report relates to the questions regarding hospitalisation and treatment, etc. to be ascertained from the life to be assured and all the questions have been answered in "No". Further, next category of questions is to be answered by the concerned doctor. Column 9 of the said report poses the question-''Are there any symptoms or signs suggesting abnormality or disease of the respiratory system''? And the said question has been answered in "No". It is common knowledge that tuberculosis is a disease relating to the lungs and as such is a disease of the respiratory system. The policy holder admittedly died of tuberculosis and from the Medical Examiner''s Report, it is apparent that at the time of medical examination late Sevak Ram Madhariya showed no symptoms or signs suggesting ''abnormality or disease of the respiratory system''. The Medical Examiner''s Report is a document of the insurer and it was on the basis of this report that insurance policy was issued in favour of the life assured, hence there is no reason to disbelieve the same. In view of the aforesaid Medical Examiner''s Report, leave record of the policy holder and photocopies of the alleged medical certificate filed by the appellant cannot be relied. So, we do not find any material on record to prove that the life assured suffered from tuberculosis or for that matter showed any symptoms or signs suggesting abnormality or disease of the respiratory system at the time of filling the proposal form or that he has made any material suppression.

We find that by repudiating the claim of the complainant/respondent, the appellant insurer, Life Insurance Corporation has committed deficiency in service. In our opinion, the finding of the learned Distt. Forum is correct and there is no need to interfere with the same. This appeal is dismissed. The order of the Distt. Forum is affirmed. Appeal dismissed.