LIFE INSURANCE CORPORATION OF INDIA THROUGH SR.DIVISIONAL MANAGER vs Rajinder Kumar Sharma

VIDE this order, two appeals are being disposed of. Appeal No. 56/1997 relates to insurance policy issued for a sum of Rs. 50,000/- whereas the other Appeal No. 57/1998 relates to insurance policy for a sum of Rs. 3 lacs. The District Forum allowed both the complaints relating to recovery of the insured amount vide order dated December 3, 1997 by passing separate orders in the two separate complaints. Direction was given to the Life Insurance Corporation to pay the insured amount alongwith bonus and interest @ 18% p.a. after four months of submitting of the claim till realisation alongwith costs of Rs. 1,000/- in each case to the complainant Rajinder Kumar Sharma whose daughter Rachna Sharma during the currency of the insurance policies referred to above had died and the claim made to the Corporation was repudiated. Both the appeals have been filed by Life Insurance Corporation against the complainant Rajinder Kumar Sharma. Main judgment is prepared in Appeal No. 56/1997.

AN application was filed by the respondent for dismissal of the appeal as barred by time. Notice of the same was given to the appellant who submitted reply alleging the appeal to be within time as having been filed within the prescribed period from receipt of copy of the order in the office of the Corporation. It was alleged that copy of the order was received in the office of the Corporation on December 22, 1997. The appeal was filed on January 21, 1998. It was further alleged that even if it is assumed that the copy was received in the office of the Corporation on December 19, 1998, January 18, 1998 was a closed day and there was effective delay of only two days in filing the appeal and the delay deserves to be condoned. Certified copy of the impugned order filed alongwith appeal indicates that the same was announced on December 3, 1997 but Despatch Number while sending copies to the parties was dated December 19, 1997. Few days time must have been taken for the certified copy to reach the office of the Corporation which as per endorsement thereon, it was received on December 22, 1997. It was argued on behalf of the respondent that in fact the certified copy was taken by Counsel for the Life Insurance Corporation from the District Forum on December 19, 1997 and it should be deemed that the Corporation came to know of the order on December 19, 1997. A strict view in such matter is not taken to debar the party from seeking relief under the Consumer Protection Act either by the complainant or by the opposite party. The law requires communication of the order to the parties and hence the date of communication is considered as the starting point of limitation for filing the appeal, the prescribed period being 30 days. It was noticed few years ago that for want of postal stamps by the fora inordinate delay was being caused in the matter of communication of the final orders passed by the FORA to the parties. Thus in order to avoid delay on that account, the Commission had issued instructions to the FORA to give certified copies of the final orders passed to Government/Semi Government bodies, who are generally represented by Standing Counsel so that parties should come to know about the contents of the order for necessary compliance. The order could be communicated either through post or through a Court massenger and even if Counsel or representative of the opposite party takes such free copy from the FORA, he would normally take a day or two to further submit it to the office. Thus for all practical purposes when office receives copy, the period of limitation of 30 days would commence therefrom as the same date would be taken as communication of the order to the office. The present appeals, therefore, are held to be within limitation and assuming that there was delay of 2/3 days in filing the appeal, in the facts of the present case the same would stand condoned. Rachna Sharma, D/o Rajinder Kumar Sharma took two insurance policies from the Life Insurance Corporation on December 31, 1994 for the sum of Rs. 50,000/- and Rs. 3 lacs respectively. She died on January 23, 1996 due to Cardio Respiratory Arrest. Her father Rajinder Kumar Sharma, who was named as nominee in the insurance policies made a claim for the insured amount to the Corporation. The matter was got investigated as it was a case of death within a short span of time of taking the policy. On October 23, 1996, the claims were repudiated by the Corporation on the ground that at the time of taking the policies, the insured had concealed material facts relating to her health. She had not disclosed in the proposal Form that she was earlier suffering from Irritable Bowels Syndrome. This led Rajinder Kumar Sharma to approach the District Forum claiming the entire amount. As stated above, the Corporation took up the plea that there was no deficiency in rendering service as after due investigation, the claim was bona fide repudiated on the ground that the insured had concealed material facts relating to her health from the Corporation. Both the parties led their evidence on affidavits and documents. The District Forum came to the conclusion that the insured as a young person having good health and had participated in athletics just before taking the policies and secured distinction. It was not expected of the insured to disclose the minor ailment of irritable bowel to the Insurance Corporation at the time of taking the policies. It was further observed that the complainant had joined service with Punjab National Bank and was medically examined and found fit to join the service. She was also medically examined by the doctors of the opposite party at the time of taking the policies. Thus, District Forum held that the repudiation of the claims was arbitrary and not sustainable in law. Hence both the complaints were allowed and directions were given to the Corporation to pay the entire amount as stated above.

Mr. B.J. Singh, learned Counsel for the Corporation has vehemently argued that the contract of insurance was based on mutual confidence and when the insured had concealed material particulars about her health while submitting the Proposal Form and by answering the relevant questions in the negative, particularly in the present case, intention of the insured was to defraud the Corporation of the insured amount by misrepresentating as above. Continuing his arguments on this line, it is further submitted that the repudiation being based on material collected was bona fide. Hence there was no deficiency in rendering service. We have given due consideration to these arguments but we find no merit therein. The complainant produced evidence that just before taking the policies, the insured had participated in the athletics and won the prize as stated by the complainant in his affidavit. She had participated in 400 metre race and long jump in 1993. She stood second in long jump in 13th Punjab National Bank Inter Region Sports Meet in the year 1995-96 at Ludhiana. She also participated in athletic and Carrom and stood second in Carrom in All India Inter Zone Sports of Punjab National Bank held at Delhi on December 24, 1995 and before joining service with Punjab National Bank, she was medically examined, certificate being Ex. C8. That being the position, there was no reason to discard the affidavit of the complainant that the insured was having good health and was a good athlete. The insurance policies as stated above were taken on December 31, 1994.

NO doubt, the death occurred within a very short span of time of taking the insurance policies and it was justified act on the part of the Corporation to investigate the claim. As usual the Proposal Form, Annexure A2 filed with the appeal indicates that to two of the questions asked, the reply was in the negative. The usual state of health was stated to be good. The specific question regarding which reliance was placed contained under Question NO. 11(D), which relates to ailment pertaining to lever, stomach, etc. The contention is that Irritable Bowels Syndroms would be considered as ailment of the stomach. Ex. A4 with the appeal is the Death Certificate of Rachna Sharma reporting that the patient had gone into multiple organ failure and died on January 23, 1996. It is reported therein that earlier the patient was investigated at PGI and diagnosed as Irritable Bowels Syndroms in June, 1995. Copy of the Outdoor Patient Ticket of the PGI was produced indicating that the investigations were for Chronic Diarrhoea. This was in July, 1995. Some investigations were done after obtaining the policies. In our view, it is not necessary to refer to the same as the relevant question is as to whether the insured was suffering from such a disease prior to the taking of the policy. Annexure A6 is the certificate of hospital treatment taken from Sacred Heart Hospital. The complaint was of loose motion, vomiting and fever for four days. Under Column NO. 7, the other disease or illness was stated to be Irritable Bowels Syndromes. Under Column NO. 10, which refers to the previous treatment, it was stated that satisfactorily the patient was cured on October 16, 1995 and the nature of the ailment was Gastroentritis. Ex. A7 with the appeal is medical attendance certificate of July, 1995 indicating that earlier treatment was taken from Patel Hospital and the patient was referred to PGI. Ex. A8 with the appeal is a certificate of the hospital treatment taken in January, 1996. The complaint was of abdominal pains and vomiting. Ex. A8 with the appeal is letter dated October 23, 1996 repudiating the claim. Thus, the question for consideration is as to whether the complaint of Irritable Bowels Syndromes could be considered as such a serious ailment of which mention was necessary at the time of submitting of the Proposal Form for securing insurance policies. In other words, concealing of such information would be a material fact to make the insurance policy void. With regard to the nature of this ailment, reference be made to Harrisons Principles of Internal Medicine, 13th Edition at page 1421 under the heading Irritable Bowels Syndromes, it mentions as under : "The Irritable Bowel Syndrome (IBS) is the most common gastro-intestinal disease in clinical practice and although not a life-threatening illness. It causes great distress to those afflicted and feelings of helplessness and frustration for the physician attempting to treat it. The patient with IBS may present with one of three the clinical variants. Patients with so-called spastic colitis complaint primarily of chronic abdominal pain and constipation. A second group has chronic intermittent diarrhoea, often without pain. Some patients have both features and complaint of alternating constipation and diarrhoea."

In the Book ''Medical Selection of Life Risks'' by RDC Brackenridge, 97th Edition under the heading Irritable Bowel Syndrome at page 457, it is observed as under : "The symptom-complex of the irritable bowel syndrome has many synonyms such as irritable colon, spastic colon and nervous diarrhoea. Descriptive terms which include the word colitis should be avoided since they imply inflammatory disease, and can, therefore, be most misleading if they appear in life insurance histories where a distinction has to be made between a relatively innocent functional disturbance of the bowel and ulcerative colitis. The irritable bowel syndrome may present in one of two main ways, Spastic Colon is the commoner variety in which abdominal pain is associated with constipation, diarrhoea or alternating periods of both. Occasionally pain is the only symptom. The other main variety is characterised by painless diarrhoea which may be continuous or intermittent in spells lasting several weeks. Bloodly diarrhoea does not occur, and if blood is passed per rectum it is generally only post-defaecation streaking from abraded piles, especially when constipation is present, and is never intimately mixed with the stools."

At page 458, it is observed as under : "Selection of Risks : Being a disorder of function the diagnosis of the Irritable Bowel Syndrome is by exclusion, but where there is a long history of recurring episodes of diarrhoea or spastic colon which have been treated and controlled satisfactorily by simple, non-specific remedies, there should be little difficulty in identifying the true cause. Where the onset is more recent an attending physician''s statement or medical attendant''s report should be obtained in order to ascertain that investigations have excluded organic disease. When this has been confirmed, a history of the Irritable Bowel Syndrome would not by itself preclude standard acceptance for life insurance."

IN Davidson''s Principles and Practice of Medicine at page 323 under the heading Irritable Bowels Syndrome, it is observed as under : "One of the commonest disorders of the ailmentary tract is that of long-standing dysfunction associated with abdominal pain for which no organic cause can be found. Bowel habit is disturbed by diarrhoea or constipation occurring alone, or alternating. Some forms of this Irritable Bowel Syndrome are also known as spastic colon and idiopathic or nervous diarrhoea."

From the above, it would be clear that Irritable Bowels Syndrome may be on account of chronic diarrhoea but there may be other reasons as well. In the Proposal Form as referred to above, there was no specific column for reporting Irritable Bowel Syndrome by the proposer at the time of submission of the Proposal Form for obtaining insurance policy. It was not expected of a young person of that age as the insured was to make any clear-cut or fine distinction between Irritable Bowel Syndrome or diarrhoea as such while giving replies to the different questions relating to her health in the Proposal Form. In the written submissions filed by Counsel for the appellant, reference has been made to different judicial pronouncements. However, it is not considered necessary to refer to the same as none of the cases so referred relates to concealment of state of health by the proposer relating to Irritable Bowel Syndrome. Mr. B.J. Singh, learned Counsel for the Corporation has argued that this was not a case where the theory of nexus was to be given importance as was reported by the District Forum. It may be observed that the death in the present case was on account of cardio arrest which had no nexus with the alleged ailment/disease of Irritable Bowel Syndrome. Learned Counsel for the appellant referred to the decision of the Supreme Court in AIR 1962 SC 814 and decision of this in Appeal No. 317/1996, LIC v. Balwinder Kaur, decided on July 9, 1997 wherein on the facts stated herein, it was found that it was not necessary to co-relate the nexus of the disease earlier suffered with the cause of the death. We are of the view that such decisions are distinguishable and the ratio therein cannot be applied in the case in hand. To repeat, it may be observed that the alleged ailment of Irritable Bowel Syndrome in the facts of the present case had no nexus with the cause of death of the insured and unless such co-relation was established, repudiation of the claim cannot be held to be bona fide.

LEARNED Counsel for the appellant argued that in the present case, where disputed questions as above were being raised, it was for the complainant to approach the Civil Court. Again he has referred to certain judicial pronouncements on the subject and it is not considered necessary to refer to the same. We have observed above that the Irritable Bowel Syndrome had no connection with the cause of death and there was no such column in the Proposal Form to report such a disease. No question arises that could be decided by the Civil Court and not by the FORA. The contention is, therefore, repelled.

FINDING of the District Forum being affirmed that there was deficiency in rendering service on the part of the Corporation in arbitrarily repudiating the claim, the complainant is held entitled to the insured amount. Mr. B.J. Singh, learned Counsel for the appellant argued that 18% p.a. interest on the insured amount could not be granted by the FORA on the basis of the Supreme Court decision in United India Insurance Co. Ltd. v. M.K.J. Corporation, III (1996) CPJ 8 (SC), wherein it was observed that interest more than 12% p.a. could not be granted. This matter was thoroughly considered by this Commission in Life Insurance Corporation of India v. Smt. Jaswinder Kaur & Ors., decided on August 18, 1997 wherein it was held that the ratio of the decision of the Supreme Court could not be attracted to the cases of Life Insurance Corporation and the question for consideration would be to compensate the complainant for the loss, if any suffered on account of non-availability of the insured funds and 18% p.a. interest on the money value would be just compensation.

For the reasons recorded above, these appeals fail and are dismissed with costs of Rs. 1,000/- in each case. Orders of the District Forum granting compensation and interest as above are affirmed. Appeals dismissed with costs.