Balwinder Kaur vs Life Insurance Corporation Of India & Anr

This revision petition has been filed by the petitioner Balwinder Kaur against the order dated 19.5.2015 of the State Consumer Dispute Redressal Commission, Punjab, (in short 'the State Commission') passed in First Appeal No.197 of 2014.

Brief facts of the case are that on 15.10.2009. Sh. Raghubir Singh i.e. the insured/deceased purchased life insurance vide policy No.164460800 Anmol Jeevan-I (with profits) for an assured sum of Rs.5,00,000/- offered by the respondent-Insurance Company wherein the insured/deceased duly paid premium amount of Rs.1398/- payable half-yearly. The insured/deceased was examined by the LIC doctors prior to approving the policy. On 05.04.2011, the insured died due to medical conditions arising out of DKA (diabetic Ketoacidosis) hematemesis. On 20.11.2012, the petitioner lodged a claim of Rs.5,00,000/- with the respondent- Insurance Company being the nominee in the policy in event of death of her husband. The respondent-Insurance Company repudiated the claim of the petitioner herein vide letter dated 28.02.2013 alleging suppression and concealment of material information in respect of previous ailments of the insured/deceased and wrong information regarding the health of the insured/deceased in the proposal form. On 02.04.2013, the petitioner herein approached the District Consumer Disputes Redressal Forum, Sangrur, Punjab, by way of a consumer complaint alleging deficiency in service on the part of the respondent-Insurance Company and sought relief of Rs.5,00,000/- along with interest @12% per annum w.e.f. 01.07.2011 till realization along with Rs.1,00,000/- on account of harassment and mental agony and Rs.20,000/- as litigation expenses to be payable by the respondent Insurance Company. On 21.01.2014, the District Forum, Sangrur vide its order dated 21.01.2014 was pleased to allow the complaint of the petitioner, wherein the District Forum after perusing evidence led by both sides, decided in favour of the petitioner and directed the respondent-Insurance Company to pay a sum of Rs.5,00,000/- to the complainant/petitioner along with interest @9% per annum from the date of complaint till realization and further a sum of Rs.7,500/- as litigation expenses. On 26.02.2014, the respondent-Insurance Company preferred a First Appeal bearing No.197 of 2014 before the Punjab State Commission, challenging the order dated 21.01.2014 passed by the District Forum, Sangrur. The State Commission, decided the appeal in favour of the appellants i.e. Insurance Company and reversed the order of the District Forum, thereby disallowing the claim of the petitioner herein vide order dated 19.5.2015. This order has been challenged in the present revision petition.

Hence the revision petition.

Heard the learned counsel for both the parties and perused the record. Learned counsel for the petitioner stated that the insurance was taken on 15.10.2009 and the insured died on 05.04.2011. Thus, it is not true that the insured was suffering from any disease and was suspectable death and therefore, the insurance was taken. The State Commission had basically relied upon report of Dr. Sachin Kaushal, Senior Resident Department of Medicine, Rajinder Hospital , Patiala, whereas the fact is that Dr.Sachin Kaushal has neither treated the insured nor he has taken the history of the patient at the time of admission. In his statement dated 01.11.2013, he has clearly stated that he has only signed the medical file while submitting to the CR Office. Thus, the certificate of Dr. Sachin Kaushal cannot be relied upon. Learned counsel for the petitioner stated that Dr. Sachin Kaushal in his cross-examination has clearly stated that doctor has not concluded that the diabetes of patient was passed for 10 years. Moreover, he has also confirmed that there was no treatment record of the patient in respect of treatment of diabetes prior to the present admission. It has also not mentioned in the record as to who has given the information that insured was suffering from diabetes for last 10 years. The District Forum has clearly examined the evidence on this subject and has observed the following:-

"8. The OPs also summoned Dr. Rahul M.O. Civil Hospital Sangrur who stated that Raghbir Singh remained under treatment in his supervision from 1.4.2011 to 4.4.2011 and the patient was a case of diabetes Tpye-2 (DM 2 with DKA with HEMETEMESIS) but during the cross examination doctor stated that history sheet does not bear the signature of the patient and it is also not mentioned if the patient was old case of diabetes or it developed recently.

The order witness Dr. Sachin Kaushal, Senior Resident, department of Medicine Rajindra Hospital Patiala stated that the patient was admitted on 4.4.2011 and he remained under his treatment and patient was suffering from diabetes Mellitus (Type-I) for the last ten years and was on regular insulin for the last about seven years. The patient died on 5.4.2011 at 1:00 PM but in the cross examination Dr. Sachin Kaushal stated that in the file there is no record of previous treatment. The name of the person who recorded the history of the patient is also not mentioned and he had filed document Ex.R-9 at the instance of the official of the LIC.

So, from the evidence of the doctors led by the OPs the contents of the medical certificates Ex.R-9 and Ex.R-7 are not corroborated as no previous record with regard to the disease of the insured has been paced on record by the OPs rather the OPs themselves have placed on record document Ex.R-3 which is medical examiner's confidential report dated 12.10.2009 which bears the signatures of Dr. Uggar Sain Garg, Sangrur. In this examination report in column 15 the doctor has mentioned that the policy holder is healthy. The OPs have not been able to produce any evidence to the effect that the policy holder was diabetic prior to obtaining the policy and in the absence of the same it can not be assumed that he became diabetic after obtaining the policy."

On the other hand learned counsel for the respondents stated that in the discharge summary it is clearly mentioned that the patient was admitted on 04.04.2011 and finally expired on 05.04.2011. It is also mentioned that he was suffering from diabetes Mellitus (Type-I) for the last 10 years. The District Forum has observed that the discharge summary was not corroborated by the evidence recorded by Dr. Rahul M.O. Civil Hospital Sangrur or Dr. Sachin Kaushal. However, the State Commission has clearly found that there was no contradiction that the statement of Dr. Sachin Kaushal, clearly corroborated that the patient was suffering from diabetes Mellitus (Type-I) for the last 10 years. Thus, the State Commission has rightly concluded that the proposed suppressed material information in respect of his disease of diabetes Mellitus (Type-I) in the proposal form. The assertion of the learned counsel for the petitioner that the insured was examined by the panel doctor of the Insurance Company is not relevant in the present case because the examination by the panel doctor of the Insurance Company is only a general examination, which is based on the answer given by the insurance himself. Any hidden disease cannot be found by the penal doctor. The State Commission has rightly allowed the appeal of the Insurance Company and has rightly dismissed the claim of the complainant on the ground of suppression of material information in the proposal form.

I have carefully considered the arguments advanced by both sides and have examined the material on record. The claim has been repudiated on the ground that the insured was suffering from diabetes Mellitus (Type-I) for the last 10 years when the proposal form was filled. The proposal form was filled on 12.10.2009 and Insurance policy commenced from 15.10.2009. The insured expired on 04.04.2011. The discharge summary mentions that the patient was suffering from diabetes Mellitus (Type-I) for the last 10 years. This information was not provided by the insured in the proposal form. The State Commission has observed that the wife of the DLA Smt. Balwinder Kaur signed the proposal form herself as agent of opposite party Insurance Company having agent Code 04874172. The complainant herself had full knowledge about the disease of the insured and still she did not get the same mentioned in the proposal form. Thus, this a clear case of suppression of material information not unknowingly, but knowingly. In taking this view, I am supported by the decision of the Hon'ble Supreme Court in P.C.Chacko and another Vs. Chairman, Life Insurance Corporation of India and others, (2008) 1 SCC 321, wherein the following has been observed:-

The insured's brother was an agent of Life Insurance Corporation of India. It was he, who had asked the insured to take the insurance policy. He, being an authorised agent of Life Insurance Corporation, presumably knew the effect of misstatement of facts. Misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature.

The insured furthermore was aware of the consequence of making a misstatement of fact. If a person makes a wrong statement with knowledge of consequence thereof, he would ordinarily be estopped from pleading that even if such a fact had been disclosed, it would not have made any material change.

The purpose for taking a policy of insurance is not, in our opinion, very material. It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated if a fraudulent act is discovered. The proposer must show that his intention was bona fide. It must appear from the face of the record. In a case of this nature it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy-holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law."

In the present case, it is established that there is suppression of material information in the proposal form. Hon'ble Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., 2009 INDLAW SC 856, has held the following:-

"[A] Insurance- Material fact- Meaning of -Term "material fact" is not defined in Act- In general terms it means as any fact which would influence judgment of a prudent insurer in fixing premium or determining whether he would like to accept risk- Held, in a Contract of Insurance, any fact which would influence mind of a prudent insurer in deciding whether to accept or not to accept risk is a "material fact".

[C] Consumer Protection- Insurance- Mediclaim policy- Repudiation of -Mis-representation and suppression of material facts regarding health made by policy holder-Non-disclosure of fact in proposal form at time of taking out mediclaim policy, that policy holder was suffering from chronic Diabetes and Renal failure fact- Whether factum of said illness was a "material" fact for purpose of a mediclaim policy and its non-disclosure was tantamount to suppression of material facts enabling Insurance Company to repudiate its liability under policy?- Mediclaim is a contract of insurance falling in category of contract uberrimae fidei, meaning a contract of utmost good faith on part of assured- When an information on a specific aspect is asked for in proposal form, an assured is under a solemn obligation to make a true and full disclosure of information on subject which is within his knowledge-Any inaccurate answer will entitle insurer to repudiate his liability because there is clear presumption that any information sought for in proposal form is material for purpose of entering into a Contract of Insurance- Held, statement made by insured in proposal form as to state of his health was palpably untrue to his knowledge- There was clear suppression of material facts in regard to health of insured and, therefore, respondent-insurer was fully justified in repudiating insurance contract- Appeal dismissed."

Based on the above discussion, I do not find any illegality, material irregularity or jurisdictional error in the order dated 19.05.2015 of the State Commission which calls for any interference from this Commission and hence the revision petition No.2087 of 2015 is dismissed.