Life Insurance Corporation of India vs S.VENKATAMMA

THIS is an appeal preferred by the opposite party in CD No. 214/1992 questioning the order of the Mahaboobnagar District Forum dated 31.7.1997 allowing that C.D. The facts are not in dispute. The complainant is the widow of one Sri S. Narasappa who took a policy for Rs. 50,000/- from the appellant. The period of the policy was 20.10.1988 to 20.10.2000. The proposal was made on 23.10.1988. It is stated in the complaint that premia were being paid regularly every six months. On 13.6.1990 Sri S. Narasappa got fever and on the next day i.e. on 14.6.1990 when taken to the hospital the Doctor suggested that he should be taken to the Government Hospital at Kurnool and while he was being taken to the hospital on the way he died. The same was intimated to the appellant by the complainant who was nominee under the policy. On 13.2.1992 the appellant by letter required the complainant for resubmission of the claim forms and the same were submitted by the complainant to the appellant in March, 1992. Thereafter also there was no response from the appellant. The complainant approached the District Forum for directions to the appellant to pay Rs. 50,000/- covered by the policy together with interest at 18% per annum from the date of the death of her husband and also Rs. 20,000/- towards compensation for suffering and mental agony and Rs. 1,000/- towards costs.

THE opposite party appeared and filed written statement stating that the insured Sri S. Narasappa suppressed the fact that he was suffering from Cancer of Hypopharynx and that he was being treated in the Government General Hospital at Kurnool and also at MNJ Cancer Hospital, Hyderabad and that he was given external cobalt treatment from 28.3.1988 to 30.4.1988. It was also stated in the written statement that the said facts were not mentioned in the proposal submitted by him. THE written statement was filed before the District Forum on 12.2.1993. It is not disputed by the learned Counsel for the appellant that even till that date no repudiation letter was sent to the complainant. Along with the written statement the appellant filed the proposal submitted by the insured and also the Certificate of Hospital Treatment dated 18.9.1990 wherein it was stated that the patient S. Narasappa aged 60 years was under treatment for Cancer of Hypopharynx in Government Hospital, Kurnool and given External Cobalt treatment from 28.3.1988 to 30.4.1988. It was also stated therein that emergency tracheostomy was done on 6.2.1990 and that he was discharged from the hospital on 17.2.1990. The District Forum held that the insured died of high fever and that the said certificate did not establish that Cancer Hypopharynx, for which he was treated from 28.3.1988 to 30.4.1988, had caused his death. We are of the view that the District Forum was in error in so holding. The District Forum failed to see that under the contract of insurance the insured should reveal the diseases from which he was suffering in the proposal form itself and suppression of the same would vitiate the contract as they are contracts uberrima fides. In Branch Manager, L.I.C. of India, Nalgonda District v. Dornala Lalitha, 1998 ALD (CONSUMER) 253, we have discussed this aspect of matter referring to a catena of decisions and following Mithoolal Nayak v. L.I.C. of India, AIR 1962 SC 814, held that suppression by the policy holder that he had been treated for a serious ailment by a physician only few months before the policy was taken had an important bearing in obtaining other party''s consent and vitiated the policy and when a policy stood vitiated it could not form the basis of any claim and the actual cause of death of the insured would become immaterial. We, therefore, find that the order of the District Forum has to be set aside. However, we find that there was deficiency in service on the part of the appellant in not taking a final decision on the claim of the complainant even though certificate of Hospital Treatment dated 18.9.1990 (marked as Ex. C-2) was available. The insured died on 14.6.1990 and the same was admittedly intimated to the appellant. That was not denied by the appellant in its version/written statement and even by 12.2.1993, the date when the written statement was filed the letter of repudiation was not sent to the complainant. Under the circumstances we are of the view that the appellant shall pay a sum of Rs. 10,000/- to the complainant as compensation for the deficiency and for the mental agony caused to the complainant. In the result the order of the District Forum is set aside and the appellant is directed to pay a sum of Rs. 10,000/- to the respondent/ complainant within four weeks from today i.e. by 8.3.1999. The appeal is accordingly disposed of. Appeal disposed of.