NINA NAYAK vs Life Insurance Corporation of India

THE petitioner, who is the widow of Bijaya Basant Nayak has filed this complaint against the Life Insurance Corporation of India asking for payment of the sum assured covered under the policy taken by her late husband together with compensation. Her case is that her husband- Bijaya Basant Nayak had taken a life insurance policy bearing No. 581393791. THE sum assured was rupees 1,00,000. He was regularly paying the premiums. Unfortunately on 30.8.1998 he suffered heart attack. He was immediately hospitalized in the Cardiology Department of S.C.B. Medical College and Hospital, Cuttack. He however expired on 1.9.1998 in the hospital. THE petitioner being the nominee of her deceased husband submitted the claim, but the Divisional Manager, Cuttack Division erroneously repudiated it on the ground that the deceased withheld material information with regard to his health at the time of effecting the insurance. According to her, the repudiation is not based on valid ground.

THE opposite parties, who are officials of the Life Insurance Corporation of India have filed a joint written version denying the claim. THEre is no dispute that the husband of the petitioner had taken the aforesaid policy and the sum assured was Rupees 1,00,000. THE date of commencement of the policy was 14.10.1995 and the life assured died on 1.9.1998. THE case of the opposite parties is that the claim being an early death claim, the petitioner was called upon to produce original policy bond, death certificate and relevant medical papers. After receiving the documents from the petitioner it was noticed that the deceased was suffering from diabetes mellitus and this fact was not disclosed by him in the proposal submitted on 30.9.1995. Condition of his health was a material information, which was withheld from them. THErefore, the claim was repudiated. It is contended by Mr. Swain, Counsel for the petitioner that the opposite parties have not produced any material to show that the life assured knew that at the time of submitting proposal, he was suffering from diabetes mellitus. Mr. Samantray, Counsel for the opposite parties, on the other hand, relying on the certificate granted by the hospital contended that there are materials to show that the deceased was suffering from diabetes mellitus.

From the certificate of hospital treatment, which is on record, it appears that the life assured was admitted in the hospital on 30.8.1998 for treatment. Column No. 4 of the certificate shows that he was admitted because he had chest pain, sweating and vomiting. Column Nos. 6 and 7 of the certificate is as follows : "6. What was the diagnosis, arrived at in the Hospital. Diabetes mellitus Corony arterus disease, extensive anti wall ml. & inferior wall non ml. 7. Was there any other disease or illness preceded or co-existed with the ailment at the time of his/her admission into the hospital? If so what was it? Please give history of such disease or illness stating: Diabetes mellitus (a) Date when such was first observed by patient (a) 1996 (b) By whom treated. (b) Not known. (c) By whom the history was reported? (c) B.M. patient (If not by the patient himself/herself, please indicate if it was in his/ her presence and to his/ her knowledge. (d) Who recorded this history? (d) Doctor on duty. (If the Doctor is not with the hospital at please give his/her present, present address)

It may be mentioned here that the mention of the year ''1996'' against Column No. 7(a) is of little consequence inasmuch as observation made in respect of the life assured in 1996 was after the commencement of the policy in October, 1995. This means the life assured could know that he was suffering from diabetes mellitus only in 1996 after submitting the proposal. Relying on the above entries, Mr. Samantray submitted that the life assured was suffering from diabetes mellitus and this fact was suppressed by him at the time of effecting the policy. Mr. Swain on the other hand brought to our notice, the medical attendance certificate which is on record from which it appears that the life assured was aged about 42 years at the time of death. The primary cause of the death was ''coronary arteners''. Above the entry ''coronary arteners'' some insertion seems to have been made which reads as diabetes mellitus. In Column No. 6 of the said certificate, it has been mentioned as follows : "What other diseases or illness (i) preceded (i) or coexisted with that which immediately caused his death? (i) Not known. (ii) Give history of such disease or illness stating : (ii)(a) Date when first observed (a) (b) By whom treated? (b) (c) By whom history reported to you."

(c) The life assured died due to cardiac failure is not in dispute. The mention of the words "Not known" at column No. 6 extracted above suggests that he did not know that he was suffering from diabetes mellitus preceding to the cardiac arrest.

WE are aware of the legal position that the contracts of insurance are of utmost good faith. The proposer for life insurance is under an obligation to disclose all material facts within his knowledge relating to the state of his health at the time of making the proposal. The averments made as to the state of health of the insured in the proposal form and the personal statement therein are the basis of the contract between the parties. The Supreme Court in Life Insurance Corporation of India v. Smt. Asha Goel, I (2001) SLT 89=AIR 2001 SC 549 has observed that repudiation of a policy issued by the Life Insurance Corporation should be one of extreme care and caution. It should not be dealt with in a mechanical and routine manner. It may be stated that a patient may not know that he is suffering from any specific disease. He knows it after he undergoes medical treatment. From the documents referred to above, we are inclined to hold that the life assured was not aware of the fact that he was suffering from diabetes mellitus at the time of submitting the proposal. He could know about it only in 1996 after commencement of the policy.

FOR the reasons mentioned above, we hold that the ground of repudiation taken by the opposite parties is not tenable. The petitioner is entitled to receive the amount assured under the policy. The opposite parties are hereby directed to pay her the sum assured amounting to rupees 1,00,000 by the end of September, 2006. In the result, the complaint is allowed with costs assessed at Rupees 2,000 (two thousand). Complaint allowed.