PUSHP LATA vs LIFE INSURANCE CORPORATION OF INDIA

COMPLAINANT , the mother and nominee of the life assured Shashi Kant has filed these petitions purportedly under Section 21(b) of the Consumer Protection Act, 1986, aggrieved by the orders dated 18.3.2011 passed by the Haryana State Consumer Disputes Redressal Commission (for short ''State Commission '') in appeal Nos. 2453, 2454 and 2455 of 2007. The consumer dispute raised in the complaints related to the non-settlement of insurance claims arising out of three insurance policies detailed in the order of the Fora below totalling to a sum of Rs. 25 lakh taken on different dates by the insured, Shashi Kant, who died on 14.5.2005 under unusual circumstances due to consumption of poison. Insurance claim was repudiated by the Insurance Company primarily on the ground that at the relevant time of making the proposal for insurance, the deceased assured, had suppressed certain material facts in relation to his health and treatment taken by him prior to making the proposal and, therefore, they were entitled to repudiate the claim. Complaints being filed were resisted on the same ground. The District Forum based on the evidence and material brought on record, repelled the plea of the respondent Insurance Company and allowed the complaints directing the Insurance Company to settle the insurance claims of the complainant by paying insured amount. Aggrieved by the said order, LIC filed appeals before the State Commission and State Commission on a consideration of the information supplied by PGIMS, Rohtak, in response to the queries made by the LIC of India and referring to the decisions of Supreme Court and this Commission on the subject held that the life assured had suppressed material facts about the status of his health at the time of taking the policy and, therefore, the repudiation of the insurance claim was justified. Accordingly, the appeals were allowed and consequently complaints were dismissed.

WE have heard Mr. Neeraj Dutt Gaur, Advocate representing the petitioner and Mr. Amit Bansal, Advocate representing the respondent and have considered their respective submissions. Besides we have also summoned the record of the District Forum in order to see as to in fact what material was produced by the LIC in support of their aforesaid plea. Learned Counsel for the petitioner would assail the impugned order passed by the State Commission primarily on the ground that it is not based on correct and proper appreciation of facts, evidence and material produced on record and that no cogent evidence/material was brought on record to establish that the life assured Mr. Shashi Kant was suffering from any disease/ailment for which he had received treatment from any Doctor or Hospital which fact he was required to disclose in the proposal form and the declaration made therein. He submits that the findings of the State Commission on the information supplied by the PGIMS, Rohtak in the format sent by LIC cannot be considered as sufficient to establish the said plea because the original record of the alleged treatment of the life assured at PGIMS, Rohtak ought to have been produced and it should have been established satisfactorily that the said record of treatment, in fact, pertained to the life assured. That apart he submits that the State Commission has wrongly observed that the life assured had received treatment as indoor patient at PGIMS, Rohtak as according to him even the record produced by the respondent LIC referred to only the treatment of a certain Shashi Kant as outdoor patient. Mr. Bansal does not dispute the factual position that the record of treatment of the life assured Shashi Kant at PGIMS, Rohtak which was the basis for repudiation of the claim was not summoned and produced before the District Forum.

THERE is no denial of the legal position that the LIC or for that reason any other Insurance Company will be within its right to repudiate the insurance claim if it is able to establish that the contract of Insurance was based on fraud or misrepresentation or by suppression of material fact(s) in regard to the status of health of the life assured. This has been held by the Supreme Court in the case of P.C. Chacko & Anr. v. Chairman, LIC of India, III (2008) CPJ 78 (SC)=IX (2007) SLT 533=IV (2007) ACC 773 (SC)=IV (2007) CLT 229 (SC)=(2008) 1 SCC 321 and Satwant Kaur Sandhu v. New India Assurance Co., IV (2009) CPJ 8 (SC)=VI (2009) SLT 338=(2009) 8 SCC 316, and in many decisions of this Commission. However, the onus to establish that there was suppression of material fact by the life assured at the time of taking the policy is on the Insurance Company who seeks to repudiate the insurance claim on such ground. The onus should be discharged by leading cogent evidence rather than making an allegation in that behalf. In Civil Appeal No. 7437 of 2011, IV (2011) CPJ 6 (SC)=VII (2011) SLT 454, P. Vankat Naidu v. Branch Manager, Life Insurance Corporation of India, Kurnool and Another, Supreme Court had the occasion to consider this aspect and had held that this Commission was not entitled to take a view which it took in the matter having regard to the facts and circumstances of the case and set aside the order of this Commission and upheld the order of the State Commission by which the insurance claim was allowed by the State Commission.

HAVING considered the entirety of facts and circumstances of the present case and the material produced before the Fora below, we are of the view that the impugned orders and findings of the State Commisson cannot be upheld on the strength of the material produced. However, since the material produced on record is stated to be based on certain other material, original record of the treatment of the life insured which he had received from PGIMS, Rohtak, it may be feasible for the respondent LIC to summon and produce the said record in support of their said plea. In the peculiar facts and circumstances of the case we grant liberty to the respondent to do so which will, of course, be subject to the right of rebuttal of the petitioner/complainant. In the result, the revision petitions are partly allowed and the impugned orders passed by the State Commission are hereby set aside and the complaints are restored to the Board of the District Forum, Rohtak to decide the complaints afresh after giving opportunity to the parties to produce further evidence in the above terms and by taking into consideration the relevant decisions rendered by the Supreme Court and this Commission in umpteen number of cases on this question. Parties are directed to appear before the concerned District Forum on 23.2.2012. A copy of the order along with the original record of the District Forum be sent back to the District Forum forthwith. Revision Petitions partly allowed.