LIFE INSURANCE CORPORATION OF INDIA vs Usha Walia

THIS revision petition has been filed by Life Insurance Corporation of India (hereinafter referred to as the ''Petitioner '') against the order of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the ''State Commission '') in Appeal No. 1687/2003 decided in favour of Smt. Usha Walia, Respondent herein, who was the original complainant before the District Forum. In her complaint before the District Forum, Respondent/Complainant had contended that her deceased son, Saurabh Walia (hereinafter referred to as the ''insuree '') had obtained an insurance policy from the Petitioner/Insurance Company on 23.1.2001 and as per the terms and conditions of the policy, in the event of a natural death the nominee would get Rs. 50,000 and in case of accidental death, the sum assured would be Rs. l lakh plus bonus for the years for which the policy was in force. On 26.4.2001, the insuree went to Uttar Pradesh for some work and died in an accident there. As per the post-mortem report dated 22.7.2001 it was stated that death occurred due to coma as a result of ante-mortem (AM) injuries on the skull. Respondent as the insuree ''s nominee filed a claim with Petitioner/Insurance Company and despite several letters and reminders, Petitioner did not settle the claim. Being aggrieved, Respondent filed a complaint before the District Forum on grounds of deficiency in service and requested that the Petitioner be directed to pay her Rs. l lakh plus bonus in respect of the policy with interest @ 24% per annum, Rs. 25,000 for mental pain and agony due to deficiency in service and Rs. 10,000 as legal costs.

THE above contentions were denied by the Petitioner/Insurance Company who stated that the Respondent ''s contention that the insuree died in an accident is not factually correct and there is no evidence of the same submitted by the Respondent in her insurance claim. On the other hand, the insuree ''s father had given a statement to the Police that his son was suffering from Asthma and despite treatment he could not be cured and therefore always carried an inhaler with him. He also stated that the cause of death of his son was due to Asthma. The Police in their report have also confirmed that an inhaler was lying near the dead body. Under these circumstances, the accidental claim was not admissible and, therefore, the same was rightly repudiated. Further, since the insuree had suppressed material facts regarding his pre-existing disease i.e. Asthma, on that ground also the claim was rightly repudiated. The District Forum dismissed the complaint by observing as follows: "We have carefully gone through the record and have heard the parties at length. The statement of T.L Narayan, Manager (Claims) categorically states that the father of the deceased stated before the police while lodging the FIR that this son was suffering from Asthma and further that the cause of death of his son was due to ailment of Asthma inasmuch as he received an attack for Asthma. It has been further stated in the said affidavit that inhaler was found lying near the dead body. The complainant on its part had ample opportunity through filing evidence, the affidavit of Sh. S.K. Walia the father of the deceased who controverted the version of the respondent LIC that he had not so stated before the police, for the reasons not stated, his affidavit was not filed by the complainant nor any such prayer was made to file additional affidavit during the course of argument when this point of pre-existing Asthma and its attack at the time of accident as well as the recovery and the seizure of the inhaler from the spot by the police was referred by the Counsel of the opposite party. A clarification to this effect was sought from the complainant but the point was not clarified. Accordingly, we have no option but to believe the version of the opposite party that the deceased was suffering from Asthma prior to his obtaining policy on his life in spite of the fact that the cause of action was mentioned as death due to comma as a result of injuries on the skull. There is no reference as to the existence of Asthma, may be because the doctor concerned had no knowledge about the deceased suffering from Asthma. "

Aggrieved by this order, Respondent filed an appeal before the State Commission. State Commission allowed the appeal by setting aside the impugned order with a direction to the Petitioner/Insurance Company to pay Rs. l lakh towards insurance amount plus bonus and Rs. l lakh as compensation for mental agony and harassment to the Respondent. The relevant part of the order of the State Commission is as follows: "Vide impugned order dated 11.8.2003 the District Forum dismissed the complaint only on the statement of the father of the deceased that the deceased was suffering from Asthma prior to the issuance of the policy and since this fact was not disclosed before obtaining the policy, the respondent was not liable to indemnify the insured amount. We have accorded careful consideration to the grounds of repudiation. So far as the factum of accident is concerned, there is no dispute. The post-mortem report is the final report which established the cause of death. No evidence has been produced by the respondent in any manner to show that death was caused due to the attack of Asthma and not due to the impact of the accident. On the contrary the post-mortem report specifically and categorically states that the death was ''due to coma as a result of ante-mortem injuries on the skull ''. Even if we accept the contention of the Counsel for the respondent that the appellant while driving the scooter suffered an attack of Asthma and fell down and as a result died, still the fact remains that death took place due to the accident and impact on the skull and not as a direct stroke of Asthma attack. The ground or the excuse taken by the respondent for repudiating such a claim demonstrates the mentality of the Insurance Company as to how they treat their consumers. "

THE State Commission, in its order severely indicted the Petitioner/Insurance Company for rejecting the claim on flimsy grounds and issued detailed instructions on how the concept and import pertaining to ''disease '' and ''pre-existing disease '' with reference to mediclaim insurance policy as well as policy of life are to be decided. Hence, the present revision petition.

COUNSEL for both parties made oral submissions. Counsel for Petitioner stated that State Commission erred in allowing the appeal of the Respondent and had unfairly passed strictures on the Petitioner/Insurance Company which need to be set aside. The onus to prove that the insuree died in an accident was on the Respondent who had failed to produce any such evidence. In fact, the insuree ''s father had himself stated before the Police that his son was suffering from Asthma and that this was the cause of his death. The report of the Police also states as follows: "On turning the dead body of the deceased, no apparent marks of injury could be found. " Further, the Panchnama report based on witnesses also concludes that the cause of death was Asthma. The post-mortem report only states that the cause of death was due to ante-mortem injuries on the skull and does not refer to any accident. Counsel for Petitioner further contended that since insuree had suppressed material facts regarding his pre-existing disease, Petitioner/Insurance Company was right in repudiating the accidental benefit claim and also not paying the life insurance claim. Counsel for Respondent on the other hand stated that the State Commission which apart from being a Court of appeal is also a Court of fact had rightly concluded that the insuree had died as a result of head injuries caused in an accident and there was no evidence that the insuree was suffering from Asthma. Counsel for Respondent further contended that the statement of the father purportedly made before the Police has little evidentiary value and in the absence of any other evidence, this revision petition merits no consideration and, therefore, deserves to be dismissed.

WE have heard learned Counsel for both parties and have gone through the evidence on record. The burden to prove that the insuree had died in an accident was on the Respondent who was unable to provide any proof of the same. On the other hand, we note that there is a statement of insuree ''s father that the insuree was suffering from Asthma since birth and, therefore, he used to keep an inhaler for emergency treatment. He further confirmed that when he visited site of the incident, he found the insuree lying dead with the inhaler on the right hand side of the body. The Panchnama based on the statements of persons who were present on the spot also concluded that the cause of death was due to Asthma. We further note that the Police report states that no injuries were found on the insuree ''s body and they were not able to find any proof during the investigation to establish that the cause of death was due to an accident. The State Commission relying on the post-mortem report in its order had concluded that the post-mortem report establishes that the cause of death was an accident. In fact, the post-mortem report only indicates that the cause of death was due to ante-mortem injuries to the skull and it does not mention any accident. However, keeping in view the statements of the insuree ''s father and other evidence it appears that these injuries were caused when the insuree fell of the scooter following an asthmatic attack and not because of an accident per se. We, therefore, set aside the order of the State Commission and restore the order of the District Forum in this regard. Respondent is thus not entitled to any insurance benefit on account of accidental death. So far as the payment of Rs. 50,000 is concerned which is to be paid to the nominee (Respondent) in the event of the insuree ''s death, we are of the view that the Petitioner/Insurance Company is not justified in repudiating this part of the claim on the ground that the insuree had suppressed material facts regarding his health/pre-existing disease. No independent evidence to this effect has been produced by the Petitioner/Insurance Company to support this contention. We are also not in agreement with the observation made by the State Commission in Para 8 of its order as to how an insurance policy is to be interpreted and decided in such cases while settling the insurance claims pertaining to ''disease '' and ''pre-existing disease '' with reference to mediclaim as well as to policy of life. As is well established through a catena of judgments including that of the Apex Court in United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, I (2003) CPJ 393 and Vikram Greentech (I) Ltd. & Anr. v. New India Assurance Co. Ltd., II (2009) CPJ 34 (SC)=IV (2009) SLT 35, that an insurance policy is to be construed strictly as per the terms and conditions of the policy document which is a binding contract between the parties and the obiter dicta of the State Commission on how these are to be interpreted is therefore unwarranted/unnecessary, and is set aside.

TO sum-up, the revision petition is partly allowed. While the Respondent is not entitled to the accidental benefit of Rs. l lakh plus bonus since it has not been established that this was a case of accidental death, Respondent is entitled to receive a sum of Rs. 50,000 plus bonus as per the provisions of the insurance policy in the event of an insuree ''s death. Counsel for Petitioner states that Petitioner/Insurance Company has already deposited the decretal amount of Rs. l lakh as per this Commission ''s order dated 23.1.2008. If that be so, the sum of Rs. 50,000 with interest may be adjusted against the entitlement of the Respondent and the remaining amount, if any, be refunded to the Petitioner/Insurance Company. Revision Petition partly allowed.