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2009 DIGILAW 303 (UTT)

LIFE INSURANCE CORPORATION OF INDIA v. PURNA DEVI

2009-06-09

IRSHAD HUSSAIN, KUSUM LATA SHARMA

body2009
ORDER (Per : Justice Irshad Hussain, President) Appellant – insurer filed this appeal against the order dated 03.01.2007 passed by the District Forum, Tehri Garhwal, allowing consumer complaint No. 27/2005 with cost of Rs. 2,000/- and further directing the appellant to pay insured sum of Rs. 50,000/- to the complainant in addition to Rs. 5,000/- as damages with interest @ 12% p.a., in case these amounts were not paid within the stipulated period. 2. The compensation awarded related to policy of insurance for sum of Rs. 50,000/- taken by complainant’s husband late Sh. Man Singh Rana for a period of 20 years. The policy commenced from 11.05.2002 and the said insured died within a period of one year on 24.04.2003 and the claim preferred by the complainant as nominee, was repudiated on 29.09.2003 on account of the deceased – insured having withheld material information regarding his health and habit at the time of effecting the assurance with the appellant. The deceased – insured was found to have been suffering from Errosive Gastritis with Duodenitis, for which he had consulted the physicians and remained on medical leave from 15.04.1998 to 09.05.1998; 18.05.1998 to 06.06.1998 and 19.05.2001 to 15.06.2001. The insured did not disclose these facts in his proposal and instead gave false answers as under : Question 11(a) During the last five years did you consult a medical practitioner for any ailment requiring treatment for more than week? (b) Have you ever been admitted to any hospital or nursing home for general checkup, observation, treatment or operation? (c) Have you remained absent from place of work on grounds of health during the last 5 years? (d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System? (e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High blood pressure, Low blood pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? (f) Do you have any bodily defect or deformity? (g) Do you ever have an accident or injury? (h) Do you use or have ever used? (i) Alcoholic Drinks (ii) Narcotics (iii) Any other drug (iv) Tobacco in any form (i) What has been your usual state of health? 3. (f) Do you have any bodily defect or deformity? (g) Do you ever have an accident or injury? (h) Do you use or have ever used? (i) Alcoholic Drinks (ii) Narcotics (iii) Any other drug (iv) Tobacco in any form (i) What has been your usual state of health? 3. The District Forum, on an appreciation of the material on record, rejected the contention of the appellant – insurance company, by observing that the insured late Sh. Man Singh Rana died due to chest pain on account of some heart disease, which had no nexus to the disease said to have been suppressed by the insured. It was also held that the insurance company made deficiency in service in repudiating the claim on the ground of suppression of the material facts as regards the disease etc. and went on to award the compensation by the impugned order, as stated above. 4. The finding of the learned District Forum has been assailed by the learned counsel for the appellant – insurance company, by submitting that the documents placed on record unfolded the falsity of the answers given by the insured in the proposal form as regards the material facts relating to the disease, with which he had been suffering and for which he had received treatment and also remained on medical leave. On the other land, learned counsel for the complainant urged that the insured was not suffering from any such serious disease, which was required to be as such mentioned in the proposal form and that employees of the government take medical leave for various purposes and it should not be made ground for repudiation of the claim, unless suppression of disease is material to the contract of insurance. According to the learned counsel, the learned District Forum, in the face of the peculiar facts of the case, was justified in coming to the conclusion that since the disease said to have been suppressed, not being fatal, the suppression of the same could not have been taken, to repudiate the insurance claim and particularly when the disease said to have been suppressed, had no nexus to the disease, which resulted in the death of the insured. 5. 5. Having considered the respective submissions, we see merit in the argument of the learned counsel for the appellant – insurance company and we are of the considered view that the life insured gave deliberate wrong answers in the proposal form to the questions, which had a great bearing on the contract of insurance and since the policy of insurance is issued on basis of most abundant faith on either side, it was incumbent upon the life insured to have revealed the disease suffered before taking the insurance policy and on that account, the contract of insurance stand vitiated in law. 6. The reasons for the aforesaid inference are that the government record through which information divulged by the District Horticulture Officer, Tehri Garhwal, revealed that the life insured remained on medical leave for the period mentioned above and which relate to the medical treatment received by the life insured for his Gastritis disease, as is evidenced by the medical certificates dated 20.04.2003; 15.06.2001; 06.06.1998; 25.04.1998 and endoscopy report dated 20.05.2001 placed on record. The endoscopy conducted on the life insured, confirmed that he was suffering from Errosive Gastritis and Duodenitis disease, which related to stomach, regarding which, as stated above, a specific question was also asked in the proposal form by the insured. The answers were given in the negative and it had been further stressed that the usual state of health of the life insured was good. It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the life assured also. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. (See Life Insurance Corporation of India vs. Smt. G.M. Channabasamma; AIR 1991 SC 392 = (1991) 1 SCC 357). 7. In view of above settled principle of law, the disclosure of relevant facts is necessary, so that the insurer may have fair opportunity to take a decision about the proposal for insurance policy made by the insured. (See Life Insurance Corporation of India vs. Smt. G.M. Channabasamma; AIR 1991 SC 392 = (1991) 1 SCC 357). 7. In view of above settled principle of law, the disclosure of relevant facts is necessary, so that the insurer may have fair opportunity to take a decision about the proposal for insurance policy made by the insured. In this case, the above glaring material facts were deliberately and intentionally suppressed and since the life insured was aged about 43 years at the time of making proposal and had had no policy of insurance in the past in his favour, the disclosure of the above material facts was of utmost necessity, so that the insurer could take a fair and proper decision in the matter of entering into contract of insurance. 8. In so far as the probative value of the documents placed on record was concerned, there can be no doubt that these were from the government record and on the basis of such documents, an inference can safely be drawn that the life insured suppressed the materials facts as regards his health and habit and other relevant matters, as referred above. The Hon’ble National Commission in the case of Bhagwati Prasad Borasi vs. Life Insurance Corporation of India; II (2009) CPJ 19 (NC) and Life Insurance Corporation of India and another Vs. Sunita Hemnani; II (2009) CPJ 172 (NC), has accepted the stand of the Life Insurance Corporation of India regarding suppression of the relevant facts by the life insured, on the basis of the acceptable documentary evidence in the form of leave record and the medical treatment taken by the life insured. Therefore, there can be no gain saying that the probative value of the documents placed on record by the insurance company, prove beyond doubt that the life insured withheld material information regarding his health and habit and other matters and that he had been suffering from Errosive Gastritis with Duodenitis, for which he had consulted and received treatment and remained on medical leave for the period mentioned above. 9. 9. In view of above, there can be no gain saying that the learned District Forum has not considered the material on record and the facts of the case in proper perspective and wrongly held that there being no nexus between the disease suppressed and the disease, which caused the death of the life insured, the repudiation of the insurance claim was unjustified. In other words, the District Forum fell in error in allowing the consumer complaint, by observing that the insurance company made deficiency in service in repudiating the claim. In fact, the complaint deserved to be dismissed for the reasons aforesaid. In view of above, appeal succeed and is to be allowed accordingly. 10. Appeal is allowed. Order impugned dated 03.01.2007 of the District Forum is set aside and consumer complaint No. 27/2005 is dismissed. No order as to costs.