M.S.RAMAA vs LIFE INSURANCE CORPORATION

IN this complaint under Section 12 of the Consumer Protection Act, 1986, the complainant has sought compensation in a sum of Rs. 1,49,500/- from the opposite parties-The Life INsurance Corporation of INdia.

THE Complainant is the widow of late T. Appaji, who expired on 13.12.89 while undergoing treatment at St. John''s Medical College Hospital, Bangalore. The late T. Appaji, who was working as the Assistant Executive Engineer at Gangavathi had obtained a Life Insurance Policy for a sum of Rs. 1,00,000/- on 28.1.89 for which he had made the proposal on 8.1.89. The late T. Appaji had also obtained a second Life Insurance Policy on 28.5.89 for which he had made the proposal on 12.4.89 for a sum of Rs. 15,000/-. The policies are at Exs. R.3 and R.4 and the proposals are at Exs. R.5 and R.10

The late T. Appaji suffered Jaundice for which he took treatment with Dr. Chandrappa, R.W. 2 at Gangavathi. On his reference he took treatment at St. John''s Medical College Hospital at Bangalore and while undertaking treatment he expired on 13.12.89. The cause of death of the deceased was Septicaemia; of Right Arm.

THE complainant made the claim under the said two policies with the opposite parties. But the opposite parties by their letters as per Exs. C. 1 dated 7.3.91 and Ex. C.2 dated 11.4.91 repudiated the claim of the complainant stating that the policy-holder the late Appaji had given untrue information in the proposal forms about his state of health. He had not disclosed that he was suffering from Diabetos Mellitus since 3 years before giving the proposal for which he had taken treatment. THE complainant thereafter filed the complaint seeking compensation under the above two policies in a sum of Rs. 1,49,500/- with interest thereof from the opposite parties-THE Life Insurance Corporation of India. The opposite parties filed their version and averred that the complaint was untenable as the claim of the complainant was repudiated by the Insurance Company by a speaking order and by a well reasoned order.

THE opposite parties further averred that late T. Appaji was suffering with acute diabetes since 3 years prior to obtaining Life Insurance Policies and he had concealed at the time of making proposal seeking Life Insurance Policies. So late T. Appaji was guilty of suppression of material facts in obtaining the Life Insurance Policies. So the nominee of late T. Asppaji-the complainant was not entitled for any claim. The opposite parties nextly averred that the claim of the complainant was repudiated by a speaking order. So it cannot be classified that the opposite parties committed deficiency in service in repudiating the claim of the complainant. During enquiry the complainant examined herself as C.W. 1 and got Exs. C.1 to C.12 marked in evidence. The opposite parties examined its Administrative Officer as R.W. 3 and other two witnesses Dr. Ravi, R.W. 1 and Dr. Chandrappa, R.W. 2 and got Exs. R.1to R.12 marked in evidence.

WE heard the learned Counsel for the parties, perused the pleadings and the material on record.

THE learned Counsel for the opposite parties submitted that the complaint did not disclose deficiency in service on the part of the opposite parties as the repudiation of the claim of the complainant was made by a speaking order giving proper reasons. So the complaint was untenable. Ex. C.1 is the repudiation of the claim of the complainant in respect of policy obtained by late T. Appaji at Gangavathi for a sum of Rs. 1,00,000/-, which reads as under: "Re: Policy No. 66196412 - Sri. T. Appaji (Deceased) - Asstt. Engineer, Zilla Parishad Engineering, Gangavathi. With reference to your claim under the above policy on the life of your deceased husband we have to inform you that we have decided to repudiate all liability under the policy on account of the deceased having withheld material information regarding his health at the time of effecting the assurance with us. In this connection we have to inform you that in the proposal for Assurance dated 8.1.89 he had answered the following questions as undernoted:- Q. No. Questions Answers 17(a) What has been your usual health Good 19 Have you been suspected of diabetes or are you suffering from diabetes or have ever passed sugar, albumin, pus, or blood in urine ? No 20 Have you consulted a medical practitioner, within the last five years for any ailments requiring treatment for more than a week ? No 21. Have you remained absent from place of your work on grounds of health during the last 5 years ? No We may, however, state that all these answers were false as we hold indisputable proof to show that about 4 months before he proposed for the above policy he had suffered from diabetes mellitus for which he had consulted a medical man and had taken treatment from him and also in a Hospital. He did not however disclose these facts in his proposal/personal statement. Instead he gave false answers therein as stated above. It is therefore evident that he had made deliberate misstatements and withheld material information from us regarding his health at the time of effecting the assurance and hence in terms of the policy Contract and the Declaration contained in the forms of proposal for Assurance and personal statement, we hereby repudiate the claim and accordingly we arc not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belong to us. For your information we are enclosing here- with copies of the proposal and personal statement referred to above."

Ex. C.2 is the repudiation letter in respect of another policy for a sum of Rs, 15,000/- obtained by late T. Appaji at Bangalore. The said repudiation letter Ex. C.2 read as under: "Re: Policy No. 610672875 on the life of Late T. Appaji. * * * With reference to your claim under the above policy on the life of your deceased husband we have to inform you that we have decided to repudiate all liability under the policy on account of the deceased having withheld correct information with regard to his health at the time of effecting the assurance with us. In this connection we have to inform you that in the proposal for assurance/personal statement signed by the deceased assured on 12.4.89 he had answered the following questions as under noted. Questions Answers 19. Have you been suspected of diabetes or have ever passed sugar, albumin, pus or blood in urine ? -No- 23. Do you use or have you ever used alcoholic drinks, narcotial or any other drugs ? If so what ? Also state quantity consumed per day ? -No- We may however state that all these answers were false as we hold indisputable proof to show that he was a known alcoholic and was suffering from Diabetes Mellitus since three years before he proposed for this policy for which he had consulted a medical man and had taken treatment from him continuously since one year before he proposed for this policy. He did not however, disclose these facts in his proposal/personal statement. Instead he gave false answers therein as stated above. It is, therefore, evident that he had made incorrect statements and withheld correct information from us regarding his health at the time of effecting the assurance and hence in terms of the policy contract and the declarations contained in the forms of proposal for assurance and personal statement, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof are forfeited to us. For your information we are enclosing herewith our pamphlet regarding the repudiation action taken by us."

THESE repudiation letters would go to show that the L.I.C. repudiated the claim of the complainant by a speaking order after due application of its mind taking all relevant factors into account. The National Commission while considering such an aspect of the matter in Divisional Manager, L.I.C. of India & Ors. v. Smt Sunita Sharma, reported in I (1994) CPJ 3 (NC)=1994 (1) CPR page 31, wherein it was held thus: "When the claim has been repudiated by Insurance Company by a speaking order an the reasons given are not irrelevant or extraneous then it is not a case of deficiency in service and complaint before Redressal Forum is liable to be dismissed."

THE National Commission in Divisional Manager, L.I.C. of India v. Smt. Alapati Vasantha Kumar, in Revision Petition No. 435 of 1994 dated 16.2.95 observed thus; "We have examined the letter of repudiation which forms part of the paper book and we do not find it possible to say that the repudiation has been made by the in- surer without due application of mind to relevant facts or in an arbitrary otherwise than in good faith. THE grounds stated in the letter of repudiation may not be legally or factually correct but that is a matter for determination by the Civil Court and not by the Consumer Forum when ex-facie there is nothing to show that the grounds are wholly untenable."

Having regard to these facts and in the circumstances of the case, it cannot be said that the opposite parties. The Life Insurance Corporation of India committed deficiency in service in repudiating the claim of the complainant. The opposite parties have also placed on record the Medical Certificate issued by R.W. 2 Dr. Chandrappa as per Ex. R 2. That shows that late T. Appaji, since 1988 was regularly taking treatment for his Diabetes Mellitus and had taken treatment from him.

THE opposite parties have also placed on record the materials of St. John''s Medical College Hospital regarding the treatment given to late T. Appaji. That shows that the deceased Appaji was suffering with Diabetes Mellitus since 3 years.

HAVING regard to these facts and in the circumstances of the case, it would be very difficult to say that the opposite parties committed any deficiency in service in repudiating the claim of the complainant. HAVING regard to these facts, we are not expressing any opinion on the merits of the claim put forward by the complainant. However, the complainant is at liberty to pursue the remedy by way of institution of a Civil Suit before the competent Civil Court. The complainant has been bona fide prosecuting the remedy before the Consumer Forums under a wrong impression that the Forums have jurisdiction and the case before the Consumer Forum has had to fail on the ground that it is not maintainable under the Consumer Protection Act, we feel sure that the Civil Court will favourably consider the question of excluding the period spent on the prosecution of this wrong remedy by the complainant while computing the peirod of limitation applicable to the suit. In the result, therefore, this complaint fails and it is dismissed. The parties are directed to pay and bear their own costs. Complaint dismissed.