BIJENDRA KUMAR vs Life Insurance Corporation of India

THIS complaint has been filed by the complainant for recovery of Rs. 1,00,000/- as sum insured against the Life Insurance Corporation of India. It is alleged that the wife of the complainant, Smt. Brij Bala was having an insured policy for a sum of Rs. 1,00,000/- only. The proposal form was filled up on 8.3.1989 and the date of commencement of the policy was 28.3.1989. The date of maturity of policy is 28.3.2014. During the existence of the policy, Smt. Brij Bala died on account of Breast Cancer on 11.9.1990. The Insurance Company was informed and a claim was also put forward. The death certificate, cremation certificate, written statement of nominee/claimant, certificate of hospital treatment, medical attendant''s certificate and the document of policy etc. were supplied to the Insurance Company. The opposite party has repudiated the claim of the complainant by letter dated 30.3.1991. The grounds for repudiation the claim are totally false and baseless. After repudiation of claim certain lettres were sent to the Insurance Company for review but nothing was done.

THE opposite party in its written version has accepted the insurance of Smt. Brij Bala wife of the complainant who was the nominee in the insurance policy. It is also admitted that Smt. Brij Bala had died and a claim was submitted before it. THE Insurance Company sent the claim forms to the complainant for getting them filled from the competent person and submit the same along with death certificate, original policy for consideration by the Life Insurance Corporation of India. The copies of those letters have been filed. The ''B'' Form which was given by the complainant, was completed by Jeevan Hospital and Nursing Home, New Delhi, Forms B1 and B2 were completed by Batra Hospital and Medical Research Centre, New Delhi and Jeevan Hospital and Nursing Home, New Delhi. Histopathology Report was issued by Jeevan Hospital and Nursing Home (P) Ltd., New Delhi. The death certificate etc. were also submitted. The representative of the Life Insurance Corporation of India could not get the copy of the details of patient history from the Jeevan Hospital and Nursing Home in order to show as to who has treated the patient. It is further alleged that on account of suppression of material facts the policy has been repudiated. According to the Insurance Company, it is alleged that the deceased knew about the breast cancer from the date prior to the filling of the proposal form.

The parties led evidence in support of their respective contentions. We have heard the learned Counsels for the parties and perused the evidence on record. The learned Counsel for the opposite party, Insurance Company has argued that in this case Brij Bala was having a lump and breast cancer at the time when she had filled up the proposal form. In the present case it has been said in the earlier part of the judgment that the proposal form was filled up on 8.3.1989 and the date of commencement of the policy was from 28.3.1989. We have to see whether Smt. Brij Bala was suffering from Cancer or was having a lump on these dates and knew about it. Certain papers were filed by the Life Insurance Corporation of India in order to prove these facts. We may go through these papers. The first paper is certificate of hospital treatment dated 9.1.1991. A perusal of it goes to show that the deceased was admitted in the hospital on 27.6.1989. There was pain and lump right breast and fever. The duration of the disease as reported to the medical examiner was not known. The answer to the query in Colomn 5 as to what was the exact history reported by the patient at the time of admission, is written as fever. It was further mentioned as to what was the symptoms narrated, it is written as not known. Whether the history of the patient was reported by patient or by someone else. It is written as yes. The name of the Doctor to whom the history was reported, it is written as Dr. D. Sessemal of Jeevan Hospital and Nursing Home. Under the column diagnosis arrived at in the hospital, it is written carcinoma right breast. Thus, it goes to show that at the time of admission on 27.6.1989 the complainant was having lump and fever and was diagnosed as a case of cancer. Meaning thereby she has a cancer on the right breast. This is after the date of filling the proposal form and issuance of the policy. The next paper on record is medical attendents certificate. In column 2(b) and (c) it is written that the patient was not seen by me after 16.10.l989. This certificate is dated 9.1.1991. It has been mentioned that the primary cause of death is carcinoma of the breast. In Column 4 there is a clause (c)-How long had he been suffering from this desease before his death. It is written as one and quarter year. What was the date on which she was first consulted during the illness. It is answered as 12.6.1989. In column 4(g) did you attend him during the whole of its course ? The answer was till 15.7.1989 and then on 6.12.1989. All the dates which are being given in these documents are after the date of the proposal form and commencement of the policy. Emphasis has been led by the learned Counsel for the opposite party on the fact that the disease with which the insured was suffering was 1 year old. It is tried to show that this 1 year relates prior to the date of taking of policy and filling up the proposal form but this is not a fact. The period of 1 year shall be taken from 9.1.1991 which comes sometime in September, 1990. By no stretch of imagination it can be stretched to 28.3.1989 when the policy was issued or prior to when the proposal form was filled. We do not agree with the arguments of the learned Counsel for the opposite party that this 1 year relates from the death of the patient. This inference cannot be drawn on the basis of the evidence on record. The other two papers which have been filed are also of no use. One medical attendant certificate has also been filed which is dated 9.1.1991. In it, it is mentioned that the primary cause of death was carcinoma right breast. She was treated in Batra Hospital from August, 1989 to September, 1990 and was suffering from this disease about one year old. Against the Column 4(g) did you attend him during the whole of its course, the Doctor has mentioned 16.10.1989 and she was treated between November, 1989 to August, 1990. Thus the duration of the disease mentioned as one year will not be from the date of death but from the date of the certificate issued by the Doctor on 9.1.1991, therefore, it will not relate back prior to the date of policy or the proposal form. Besides this, there is no other evidence on record to prove that the complainant knew about this lump and the development of cancer in the right breast prior to or at the time of filling up the proposal form. Thus we come to the definite conclusion on the basis of the evidence on record that the burden to prove the fact was on the Insurance Company and the Life Insurance Corporation of India has miserably failed to prove that the insured was having lump and cancer on the right breast at the time of filling of the proposal form or at the time of issuance of the policy. When the deceased did not know about the disease at that time how could it be disclosed to the Insurance Company. Thus we find that the claim put forward by the complainant is genuine. The complainant has prayed that he should be allowed the claim of Rs. 1,00,000/- as the amount of the policy. The complainant is entitled to get the amount of the policy for which the insurance was taken. As regards the interest, the complainant has prayed for interest at the rate of 24% per annum while the learned Counsel for the opposite party, Insurance Company has argued that the interest should not exceed 9% per annum.

NOW the question of rate of interest arises. The learned Counsel for the Insurance Company has argued that the interest should be fixed @ 9% per annum. In support of his case, the learned Counsel for the Insurance Company has placed reliance on the case of Smt. Kaushnuma Begum & Ors. v. The New India Assurance Company Limited & Ors., I (2001) ACC 151 (SC)=I (2001) SLT 300=JT 2001 (1) SC 375. According to learned Counsel in this case the interest at the rate of 9% per annum has been directed to be paid. We have gone through this case. It has been held that how we have to fix up the rate of interest. Section 171 of the Motor Vehicles Act empowers the Tribunal to direct that ''in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as may be specified in this behalf''. Earlier, 12% was found to be the reasonable rate of simple interest. With a change in the economy and the policy of the Reserve Bank of India, the interest rate has been lowered. The Nationalised Banks are now granting interest at the rate of 9% on fixed deposits for one year. We, therefore, direct that the compensation amount fixed here-in-before shall bear interest at the rate of 9% per annum from the date of the claim made by the appellants. The amount of Rs. 50,000/- paid by the Insurance Company under Section 140 shall be deducted from the principal amount as on the date of its payment, and interest would be recalculated on the balance amount of the principal sum from such date. Thus we find that the Hon''ble Supreme Court has considered the provisions of Section 171 of the Motor Vehicles Act. The provisions of the Consumer Protection Act were not considered in that case and the interest at the rate of 9% per annum was allowed which is being granted now on fixed deposits by the Nationalised Banks. Learned Counsel for the complainant has argued that the Hon''ble Supreme Court has in all previous cases under Consumer Protection Act has confirmed the rate of interest at 18% per annum because this also represents the amount of damages which has to be given. According to learned Counsel the damages are granted in the form of interest and damages consist of many components. Learned Counsel for the complainant has a point in this argument. Under the Consumer Protection Act no rate of interest has been provided. The Hon''ble Supreme Court has granted interest under the provisions of Section 34 of the Civil Procedure Code. The Hon''ble Supreme Court in the case of Sovintorg (India) Limited v. State Bank of India, II (1999) CPJ 4 (SC)=VI (1999) SLT 545=1999 (6) SCC 406, has held that the interest can be awarded as compensation or damages because it is based on equity, justice and good conscious. Reliance has been placed by the learned Counsel for the complainant on the case of Jit Ram Shiv Kumar v. National Insurance Company, III (2001) CPJ 5 (SC)=I (2001) SLT 660=2001 (I) Supreme 333. In that case the interest was awarded by the National Commission at 18% per annum on the principal amount. Thereafter an appeal was brought to the Supreme Court against the judgment of the National Commission. The Apex Court directed for deposit of principal amount along with 12% per annum interest. Thereafter, the Hon''ble Supreme Court passed the final order confirming the award of principal amount and interest as reported in 2001 CTJ 1. It was held in 2001 (I) Supreme 333 (supra) that liability to pay interest at 18% does not seize merely because principal amount along with 12% interest was deposited pursuant to interim order. The respondent was, therefore, held liable to pay interest at the rate of 18% per annum. Thus the Apex Court has held that 18% interest is to be paid in cases under Consumer Protection Act. That was a case against the Insurance Company which went to the Hon''ble Supreme Court against the judgment of the National Commission. Thus we find that in cases arising under the Consumer Protection Act, the Hon''ble Supreme Court has consistently taken a view that interest at the rate of 18% per annum has to be paid on the compensation amount. This rate of interest has been allowed by the Hon''ble Supreme Court keeping in view the facts that the claims which are pending before the Insurance Companies are not decided by the Insurance Companies within a reasonable time and the claims are repudiated on flimsy grounds. The complainant is harrassed by the Insurance Company and he has to suffer mental torture and has to run to the office of the Insurance Company and has to wait for getting the insured amount after entering into litigation. All these factors are considered while granting compensation in the form of interest in such cases. However, the learned Counsel for the complainant has argued that the interest should be awarded at the rate of 18% per annum in view of the decision of the Hon''ble Supreme Court in the case of United India Insurance Company Limited v. Fancy Traders, VII (2000) SLT 365=JT 2000 (10) SC 337. The Hon''ble Supreme Court in this case held that the interest at the rate of 18% per annum is justifiable. The order of the Hon''ble Supreme Court is very short and is being reproduced below : "ORDER (1) Leave is granted. (2) Heard learned Counsel for the parties. (3) The net loss caused to the respondent due to fire was assessed at Rs. 4,72,146/- but the applicant paid only a sum of Rs. 2,75,146/- to the Bank of the respondent. The balance amount together with interest at the rate of 18% was ordered to be paid to the respondent by the State Commission. (4) Having regard to the facts and circumstances of the case, the High Court also did not interfere with the rate of interest awarded by the State Commission. We find no justification for our interference in the matter under Article 136 of the Constitution. (5) The appeal is accordingly dismissed. There shall be no order as to the costs."

IN a recent case, National INsurance Company v. Jit Ram Shiv Kumar, III (2000) CPJ 5 (SC)=VI (2000) SLT 624=2001 CTJ 1 (SC), the Hon''ble Apex Court had also considered the quantum of interest which should be awarded in the case of INsurance Company. IN that case before the Apex Court, it was held that the repudiation of the claim by the INsurance Company was wholly malafide. It was held that all the risks were covered by the insurance policy. The ship which was carrying the goods was lost on the high seas. Before the Hon''ble Supreme Court it was contended that the Commission was not justified in awarding interest at the rate of 18% per annum to the respondent. The Hon''ble Supreme Court repelled the contention of the INsurance Company about the rate of interest in the following words : "So far as the question of quantum of interest is concerned, we see no infirmity in the order passed by the Commission except that the order of the Commission requires a little alteration so that the date 6.12.1987 is altered to 12.8.1987 in consonance with the judgment of the Commission itself."

Thus in view of the majority of decisions of the Hon''ble Supreme Court, it is now clear that the interest at the rate of 18% per anum is to be paid by the Insurance Company when it is found that the deficiency is on behalf of the Insurance Company. Thus the complaint is liable to be decreed. ORDER The complaint is decreed. The complainant shall get a sum of Rs. 1,00,000/- as sum insured from Life Insurance Corporation of India. The complainant shall also get interest at the rate of 18% per annum on Rs. 1,00,000/- from the date of two months after the date of submission of claim. The opposite party, Insurance Company shall pay a sum of Rs. 3,000/- as cost to the complainant. Let compliance of this order be made within a period of two months from the date of this order. Let copy of this order be made available to the parties as per rules. Complaint allowed.