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2006 DIGILAW 501 (CHH)

LIC OF INDIA v. S. VARLAKSHMI

2006-11-09

R.S.AWASTHI, V.K.AGARWAL, VEENA MISRA

body2006
ORDER As per Hon'ble Shri V.K. Agarwal, President:- 1. This appeal, under section 15 of the Consumer Protection Act, 1986 arises from the order dated 23.05.06, in complaint No.274-04, by District Consumer Disputes Redressal Forum, Durg (hereinafter called 'District Forum' for short) directing the appellant - Life Insurance Corporation of India (LIC for short) to pay to the complainant /respondent a sum of Rs.25,000/- with interest @6%p.a. payable from 12.10.04 as also Rs.1,000/- for mental harassment to her and Rs.500/- as cost of the complaint. 2. Indisputably, the complainant's husband S. Sanyasi Rao obtained an insurance policy No.382240712 on 3.10.01. The maturity date of the said policy was 3.09.2016. It is also not in dispute that the assured amount payable under the said policy was Rs.25,000/-. It is further not in dispute that the insured S. Sanyasi Rao, husband of complainant / respondent died on 6.04.02. The complainant's claim under the said policy was repudiated by the appellant/LTC on the ground that the insured did not disclose material facts regarding other policies obtained by him. Aggrieved, the complainant preferred complaint before the District Forum. 3. The appellant/ LIC resisted the complaint. According to them, column NO.9 of the proposal form elicited information from the insured, regarding earlier policies obtained by him. The said query was answered in the negative by the insured. According to the appellant/ LIC, the complainant stated that he had not obtained any other policy earlier. It was averred that this was a material suppression, by the insured, as he had obtained several other policies. Therefore, the appellant /LIC repudiated the claim of the complainant, on account of suppression of material facts as above. 4. By the impugned order, the District Forum allowed the complaint holding that proposal for earlier policy No.380573288 was obtained and filled on 14.10.01 while the policy in question was obtained on 31.10.01 , i.e. merely after 16 days thereafter. It was observed by the District Forum, that it is not established that the document relating to the policy NO.380573288 was handed over to the complainant's husband prior to the submission of proposal form for obtaining the policy in question, On the above reasoning the District Forum held that there was no material suppression and therefore directed that the assured sum of Rs. 25,000/-under the policy, with interest etc. be paid to the complainant. 5. Heard the learned counsel for the parties. 25,000/-under the policy, with interest etc. be paid to the complainant. 5. Heard the learned counsel for the parties. Record perused. 6. Learned counsel for appellant/LIC submitted that appellant has established that the complainant's husband/insured had obtained several other policies. However, he chose not to disclose the details sought regarding tile policies and, answered the query regarding the earlier policies obtained by him in the negative, as is dear from column No: 9 of the proposal form, submitted by him, It was therefore submitted that the complaint having suppressed material facts regarding other policies obtained by him, the repudiation of the complainant's claim by the appellant/LIC was justified. 7. As against the above, learned counsel for complainant/respondent submitted that it was incumbent for the appellant /insurer to establish breach of good faith by willful suppression, Learned counsel for complainant/respondent in the above regard, relied upon the decision of Apex Court in LIC Vs. Smt. G.M Chennabasemma in which it was observed that the burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the insurer corporation. Learned counsel also relied upon the decision of National Commission in LIC Vs. Badrinageshwaramma (deceased) and other and M.P. 'State Commission in Smt, Sunita-Bai Sahu. Vs. LIC and anr. in which similar proposition has been laid down It was submitted that since appellant/LIC failed to discharge its burden of proving material suppression of facts by the insured, it was under an obligation to make payment. It was therefore submitted that the impugned order directing appellant/LIC to make payment to the complainant was justified. 8. Learned counsel for appellant/LIC submitted that the complainant's statement furnished by herself to the appellant/LIC, photocopy of which has been filed on record clearly indicates that her late husband/insured S. Sanyasi Rao had obtained 4 other policies. The details and particulars of the said policies obtained on 16.09.86, 22.08.94, 28.01.99 and 2.10,01 have also been given in the claimant's statement. Similarly, the complainant’s letter addressed to the appellant, copy of which has also been filed on record, also clearly indicates the 4 other policies were obtained by her husband. Thus, there remains no scope for doubt that the complainant's husband/insured S. Sanyasi Rao had obtained 4 other policies besides the policy in question Thus, the appellant/insurer has discharged its burden of proving the said fact viz, other policies were obtained by the insured. Thus, there remains no scope for doubt that the complainant's husband/insured S. Sanyasi Rao had obtained 4 other policies besides the policy in question Thus, the appellant/insurer has discharged its burden of proving the said fact viz, other policies were obtained by the insured. 9. In view of above, it is clear that the complainant's contention that burden of proving material suppression of facts as above has not been discharged by the LIC, cannot be accepted. To reiterate the burden as above stands duly discharged by the LIC, by producing the statement of the complainant herself and other documents as referred above. 10. It is also clear that the insured had in column NO.9 replied the query of the appellant/LIC as to whether he had obtained any other policy earlier in the negative. Therefore, there was clear breach of faith reposed by the appellant / insurer in the insured, who failed to disclose material information regarding other policies obtained by him. Therefore, though as many as 4 other policies were obtained by the complainant's husband /insured; however, this fact has deliberately been suppressed by him in the proposal form submitted by him to the appellant / LIC. This is clearly breach of the confidence and faith uberrima fides, between the parties. Therefore, the repudiation of the complainant's claim by the appellant / LIC cannot be termed as deficiency in service. We may in the above context refer to the decision of this State Commission in Branch Manager, LIC Vs. S. Radha, Appeal NO.75-04 decided on 24.12.04. In the foregoing circumstances, the complainant / respondent cannot get any benefit under the policy. 11. Consequently, for the foregoing reasons, this appeal is allowed. The impugned order is set aside. The complaint is dismissed. However, the complainant shall be at liberty to avail of such other legal remedy as may be available to her. Appeal Allowed.