MURLI DEVI AGARWAL vs CHAIRMAN LIFE INSURANCE CORPORATION

THE complainant is the widow of Shri Sitaram Agarwal who died on 23.10.89. Shri Sitaram Agarwal obtained Policy No. 190139049 on 9.12.89. THE sum assured was Rs. 30,000/-. he obtained another Policy No. 19027598 on 23.2.88 for Rs.25,000/-. THE complainant was the nominee in both the policies. THE mode of payment of premium was quarterly. THE husband of the complainant had paid premiums upto the date of his death. After the death of Sitarams he sent the papers and Policy No. 190217598 to the office of the Branch Manger. THE second policy on the date of the filing of the complaint was with the complainant. She wrote to the Branch Office in regard to both the policies. She did not send the claim form in regard to the second policy. THE opposite party by its letter dated 31.3.89 repudiated the claim of the complainant and denied their liability for any payment under Policy No. 1920157%. THE claim was repudiated on the ground that the complainant deliberately made false statement in regard to his health while answering questions Nos.17, 18 and 20 in the proposal form. THE complainant filed the complaint before the State Commission on 17.7.91 praying that the sums assured of the two policies namely Rs. 25,000/- and Rs. 30,000/- may be ordered to be paid to her together with interest @ 18% for financial crisis and mental torture a sum of Rs. 20,000/- was claimed, besides these expenses to the tune of Rs. 1000/- for going again and again to the Branch Office and Rs. 25,000/- for cruel behaviour of the opposite parties were also claimed. Thus in all a sum of Rs. 1,01,000/- was claimed by the complainant.

THE opposite parties submitted the version of the case opposing the complaint filed by the complainant. Various objections contained in paras 1 to 15 under the head preliminary objections were raised regarding the maintainability of the complaint. Principal preliminary objections are:- 1. that as there are complicated and complex question involved in the complaint, the proper remedy for the complainant is in Civil Court. THE contract of insurance is arrived at between the parties as for that matter by the proposer on the basis of the conditions printed in the policy. 2. that the claim of the complainant was repudiated on account of suppression of material facts and therefore the complaint is not maintainable.

That the proposer of the policy, namely, the husband of the complainant obtained the policy by fraudulent intention and so the complainant is not entitled to any amount.

That no cause of action arose to the complainant in respect of Policy No. 19013049 obtained by the husband of the complainant Sita Ram.

THAT the complainant had given wrong answers to questions No. 17,18(g)and20 in the proposal form. The proposer was suffering from CH-MYELOID Leukemia preceding two years but still he suppressed the fact of ailment. The claim was resisted. Both the parties placed photostat copies of the documents in support of their respective pleadings. The complainant submitted; (i) photostat copy of death certificate dt. 26.10.89; (ii) Letter dated 31.3.90 from the opposite parties; and (iii) proposal No. 2281-192. 3. Opposite parties submitted proposal No. 4275794, 2281-192, certificate of Secondary Board, Rajasthan No. 7510; statement of the proposer submitted alongwith the proposal dt. 26.1.88; certificate of the doctor dt. 2.10.90; certificate of hospital treatment; letter of the complainant dated 21.11.89. 4. The complainant filed her affidavit which was sworn on 31.5.92. On behalf of the opposite parties affidavit of Shri A.S. Ramanathan, Manager, Law, LIC Div. Office, Jaipur at 20.2.92 was submitted. 23.9.92 was fixed for arguments. It was adjourned on the request made on behalf of the complainant to 16.11.92. The complaint was called in two round. But nobody had appeared on behalf of the complainant and so the arguments of the learned Counsel for the opposite parties were heard. It appears THAT an application was filed on behalf of the complainant after the hearing on 16.11.92, praying THAT time may be allowed for submitting the written arguments. On 16.11.92 the complaint was posted for dictation of orders on 27.11.92. On THAT day order was dictated in part and the order was Completed on 28.11.92 In between 16.11.92 to 27.11.92 no efforts were made on behalf of the complainant to submit the written arguments. 5. We have, however, carefully perused the complaint, the version of the case, the affidavits fifed by the parties and the documents submitted by them. There are two policies: (1) Policy No. 190139049 dated 9.12.87, insured amount Rs. 30,000/-; and (ii) Policy No. 190217598 dated 23.2.88, insured amount Rs. 25,000/-. As regards Policy No. 190139049 the opposite parties in para 13 of the version of the case have stated THAT no cause of action arose to the complainant, for, the complainant did not lodge any claim before the opposite parties in respect of the insured amount and THAT the opposite parties have not given any final order in regard to this policy. The complainant did not complete the formalities of the required documents and so the cause of action did not arise and therefore she cannot raise any question in respect of THAT policy in the complaint. Para 13 of the version of the case is as follows:- "YAH KI POLICIE SANKHYA 19013049 KA FARA MAI COUSE OF ACTION HI ARISE NAHI HUA HAI KUIKI AJJ TAK NA HI PRARTHI NA KOI CLAM OR PARTHIGAN NA SAMAKSH PRUSTUTH KIYA HAI, NA HI IS POLICY PAR APRARTHIGAN DWARA KOI ANTIM NIRNAY HI LIYA GAYA HAI. KUNIKI PARTHINI NA CLAM SAMBANDHIT JO WANCHHIT DAST AWASATA KE AJJ TAK PURTI HEE NAHI KI HAI ATTAH: IS POLICY KA CAUSE OF ACTION HI ARISE NAHI HUA HAI. ISLEYA IS BAD MAI ISKA MUDDA NAHI UTHAYA JA SAKTA." In these circumstance we are to deal with the subsquent Policy No. 190217598 which was obtained on 22.3.88 and we have to see whether the complainant is entitled to the assured amount or not? The sum assured in the policy is Rs. 25,000/-. The proposal form is Form No. 2281 - 192. By letter dated 31.3.90 the claim was repudiated. It will be useful to exerpt the whole letter:- "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 with-held material information regarding his health at the time of effect-ing the assurance with us. In this connection we have to inform you that in the proposal for assurance and personal statement signed by the deceased assured on 17.2.88 at the time of his medical examination he had answered the followiwng questions as undemoted:- QUESTIONS ANSWERS 17. What has been your usual state of health? Good 18. Have you ever suffered or (g) are you suffering from cancer, leprosy, rheumatic goat, enlarged glands or tumours? No. 20. Have you consulted a medical practitioner within the last 5 years for any ailments requiring treatment for more than a week? No. We may, however, state that all. these a answers were false as we hold indisputable proof to show that about 2 years before he proposed for the above policy he had suffered from Leucaemia for which had consulted a medical man and had taken treatment from him. 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 mis-statements 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 are 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 herewith copies of the proposal and personal statement, referred to above.

IN answers to questions 17, 18(g) & 20 the proposer had written "No". About two years before the deceased - insured proposed for insurance he had suffered from Leukemia for which he consulted a doctor and took treatment from him. He gave false answers. IN support of that opposite parties have submitted certificate of hospital treatment dated 2.1.90. Column No. 5 is relevant. It is written that he suffered from Chrome Myeloid Leukemia-diagnosed 2 years back etc. Column No. 6 is with respect to diagnosis arrived at in the hospital. It is mentioned "Ch. Myeloid Leukemia in blast crisis". Ex. 7 shows that provisional diagnosis was "Chronic Myeloid Leukemia in blast crisis." Thus according to the opposite parties wrong information was given and there was suppression of material facts in-as-much as in the earlier policy ''No'' was written and so also in the subsequent policy. According to the opposite parties in regard to question 16 in the proposal forms there was contradiction as is evident from Ex.1 & Ex.2inasmuchas in the proposal form (Ex.2) relating to the first policy in Column No. 16 it was written that the mother of the proposer died from Cancer at the age of 62 years whereas in the subsequent proposal Form (Ex.2) in column No. 16''No''was written. Thus according to the opposite parties the proposer (the husband of the complainant) was guilty of suppressing material facts. The documents are supported by the affidavit of Mr. A.S. Ramnathan. It is well settled that the contracts of insurance, unlike any other contracts are contracts uberrimae fides, i.e. in such contracts the duty is cast upon the assured to disclose all material facts known to him but unknown to the insurer and the former is bound to tell the latter everything which may be supposed likely to affect the latter''s judgment. As the contracts of insurance are made upon the basis of representations upon the truth or falsity of which the validity of the contract depends, a non-disclosure of any material circumstance or misrepresentation, however, unintentional, has the same effect as fraud in vitiating the contract. The assured is bound to disclose and truly represent all the facts within his knowledge concerning the risk which are material for the underwriter to know; and the non-disclosure or misrepresentation of any such fact gives the underwriter an election to avoid the contract, as in the case of fraud although not accompanied by any fraudulent intention. The claim was repudiated in good faith after application of mind to the relevant facts and circumstances. The proposer was guilty of deliberate misstatement of withholding material information in respect of his health and therefore no amount can be paid to the nominee of the policy namely the complainant, hi these circumstances it cannot be said that by not settling the claim of Policy No. 190217598 the service rendered by the opposite parties suffered from any deficiency. No amount can be paid by the opposite parties to the complainant in respect of the above policy. It has already been stated, hereinabove, that the plea of the opposite parties is that no cause of action has arisen to the complainant in regard to Policy No. 19013049 and they have not repudiated the claim as yet. In this view of the matter it is not necessary to adjudicate the claim of the complainant regarding Policy No. 19013049 in this complaint. It will be open to the complainant to process the claim in regard to Policy No. 19013049 before the opposite parties in accordance with law and the order passed in this complaint will not come in her way, for, as per the version of the opposite parties they have not decided the claim pertaining to this policy, for, no cause of action has arisen to the complainant. 10.It, is however, made clear that this order will not preclude the complainant if she so likes to file a civil suit for the recovery of the disputed amount, if so advised. 11.Subject to the observations made hreinabove, the complaint is dismissed. There will be no order as to costs of the complaint. Complaint dismissed. ______________