Life Insurance Corporation of India vs SUSHILA SAXENA

IN this appeal the appellant Life INsurance Corporation of INdia, has challenged the validity of the judgment and order dated 24.3.2001 passed by District Forum Bulandshahr in Complaint Case No. 709/98. Briefly stated the facts of the case are as follows : The husband of the complainant Smt. Sushila Saxena had taken a fifteen year Jeevan Surabhi Policy with profits (with accident benefit), from the oposite party vide Policy No. 561013217. The policy was effective from 28.3.1996 and the sum assured was Rs. 1 lac. The amount of monthly premium to be paid to the opposite party was Rs. 1,000/-. The husband of the complainant died on 18.10.1996 in Jaswant Rai Hospital at Meerut. The complainant was the nominee in the said policy and is entitled to receive the amount of insurance allongwith bonus and other benefit but she has not been paid the claim preferred by her before the opposite party inspite of the fact that she had been cooperating with them. A registered notice was given by her on 30.12.1997 to the opposite party but no satisfactory answer was given. The opposite parties do not want to settle the claim of the complainant and are harassing her. Again on 4.9.1998 she gave an application to the opposite party and in reply she was informed that enquiry in regard to the claim is going on but desired cooperation was not being extended by the complainant. On 24.11.1998 the complainant was informed that her claim will be treated as no claim. The complainant, therefore, lodged a claim before the District Forum for award of insured amount of Rs. 1 lac alongwith bonus and interest etc. She also claimed Rs. 50,000/- as compensation for mental and financial harassment alongwith interest @ 24% p.a. from the date of filing the claim. The cost of Rs. 25,000/- was also claimed.

IN the written version before the District Forum the opposite party admitted the insurance. It was also stated that the complainant inspite of being given several opportunities did not furnish to the opposite parties the details of illness and treatment done of the life assured. Several letters were sent to the complainant on 30.12.1997, 5.2.1998, 12.9.1998 and 24.11.1998 in which the details of the illness and treatment done were asked from the complainant but no details were made available by the complainant and, therefore, the claim could not be settled because of non-cooperatiion on the part of the complainant. The claim has been repudiated on 4.10.1999. The claim form submitted by the complainant states that the life assured died because of chronic liver disease on 18.10.1996. The death of life assured occured after about 7 months from the date of taking insurance policy. The life assured was treated by Dr. J.C. Mudgal at Bulandshahr and later on in Meerut but the details of the treatment were not given by the complainant or by the doctor. The chronic lever disease is such disease which develops gradually and cannot be of two months duration. Because of non-cooperation of complainant and doctor concerned it is clear that the complainant''s husband was having this illness at the time of taking insurance and the same fact was concealed by the life assured and, therefore, the contract of insurance becomes void. IN the circumstances the complaint is not maintaiable before the District Forum. The complainant is not liable for any relief. The parties led their evidence in the form of affidavits before District Consumer Forum and the Forum after hearing the two parties decreed the claim directing the opposite parties to pay to the complainant an amount of Rs. 1 lac along with accident benefit and bonus. Interest is also allowed @ 12% p.a. from the date of institution of the complaint till the date of payment besides a compensation of Rs. 5,000/- and cost of Rs. 500/- was also ordered to be paid to the complainant.

Aggrieved of this order the opposite party Life Insurance Corporation of India has come in this appeal.

WE have heard the learned Counsel of two parties. The learned Counsel for appellant has argued that the Forum has wrongly awarded accident benefit while the life assured had not died because of any accident. It was case of the illness of lever and stomach that his death took place. Since the insurance was done on 28.3.1996 and the life assured died on 18.10.1996, it was an early death claim and, therefore, as per rules, investigation had to be carried out. The insured was suffering from chronic lever disease prior to the proposal but he failed to disclose the ailment in the proposal. There was deliberate concealment of material facts about ailment suffered by the life assured which was in gross violation of basic principle of insurance which is done on utmost good faith. The complainant as well as the doctors who carried out the operation refused to cooperate with the Corporation and did not submit the information desired and in the absence of this information the claim could not have been settled and was later on repudiated. Since the death had taken place after 6 months and 20 days and disease from which the life assured was suffering was chronic liver disease which develops in longer span of time, the claim was repudiated. Learned Counsel for the respondent has argued that it is a case of stomach ailment and the liver problem was only for few days and not at the time of taking insurance policy. The doctor of L.I.C. had examined the complainant''s husband and he was found fit. The complainant did not receive from the attending doctor the papers in regard to treatment of her husband and as such she could not give these papers to the opposite party. Dr. Mudgal who had been treating the life assured had orally said that the life assured was suffering from stomach ailment and nothing in writing was given. It was also argued that the patient developed the ailment and within two months he died. There was, therefore, no question of concealing any information at the time of insurance since the complainant''s husband was healthy at the time of taking insurance. The Insurance Company did not settle the claim for a long period of two years.

WE have also gone through the documents filed in the form of evidence in this appeal. A perusal of the proposal form goes to show that the life assured had been working as meter reader in the Electricity Department and was alright. It was a medical policy and Medical Officer of L.I.C. had also verified the fact that the complainant was not suffering from any disease. The reply given in Column No. 9 of the proposal form was negative, which relates to disease pertaining to liver, stomach, heart, lungs, kidney or nervous system. This goes to show that at the time of taking insurance the life assured had no knowledge of the disease, nor he was suffering from the same. The certificate of hospital treatment page 21 of the Memo of Appeal has been signed by the Mr. Malay Sharma which indicates that the life assured was treated at Jaswant Rai Hospital at Meerut. The main reason for the death has been recorded as chronic liver disease. At the same time in Column No. 4 it has been stated that the patient was suffering from this disease from August, 1996 and for the first time the symptoms of disease were known in August, 1996. Column No. 10 of the same certificate goes to show that endoscopy of the deceased patient was done on 2.9.1996. Endoscopy is also done for detection of number of ailment of stomach and not for liver problem alone. Further chronic disease as written by the doctor is a vague term. It is fact that the Insurance Corporation wrote a number of letters to the complainant and also to the doctor. But since the complainant did not give the details of the treatment from the hospital/doctor how could she had given the details to the opposite party. It was equally the responsibility of the opposite party to have collected the details from the attending doctor if more details than what have been furnished, were required by the opposite parties. The husband of complainant was meter reader in Government Department and in case he had been suffering of any illness from before the date of taking insurance then he could have remained on leave from time-to-time. Normally in such cases the Insurance Company gets in touch with the employer and takes the sick leave record which has not been done in this case which clearly goes to show that the complainant did not conceal any fact in his proposal form the disease of liver developed in October, 1996 whereas the insurance was taken on 28.3.1996. The District Consumer Forum has dealt with this aspect of the matter in detail and has come to the right conclusion that there was no question of hiding any fact in regard to the health of the life assured at the time of taking policy. The policy taken by the complainant was 15 years Jeevan Surabhi Policy with profits (with accident benefit). The case of the complainant is that the life assured died because of stomach ailment. The medical report of the doctor also goes to show that the reason for death has been shown as chronic liver disease. We, therefore, agree with the learned Counsel that the life assured did not die of any accident. The District Forum in its judgment and order has ordered the payment of Rs. 1 lac with accident benefit. The Forum should not have decreed the claim for the accident benefit as there was no accident. With this modification the judgment and order of the Forum is liable to be confirmed. The appeal is, therefore, liable to be partly allowed. ORDER The appeal is allowed in part. It is directed that the opposite party shall pay to the complainant amount of insurance of Rs. 1 lac with profit without any accident benefit. The judgment and order of the District Forum is, therefore, modified to this extent and the rest portion of the judgment and order is confirmed. The appellant shall also pay Rs. 1,000/- as cost to the complainant. Let copy as per rules be made available to the parties. Appeal partly allowed with cost.