DIVISIONAL MANAGER, LIC OF INDIA vs JALASOOTRAM PEDDALU

THIS appeal is preferred by the opposite parties in C.D. No. 85 of 1997 before West Godavari District Forum far Eluru and the complainant in the CD is respondent before us. In its judgment District Forum asked the appellants to pay to the respondent/complainant, Jalasootram Peddalu Rs. 1,00,000/- with 18% interest from 21.3.1997 and also costs of Rs. 5,000/. The appellants are the Divisional Manager, Rajahmundry and the Branch Manager, Tadepalligudem of Life Insurance Corporation (LIC) of India.

THE complainant''s son, Rambabu, took an Endowment Assurance policy, bearing No. 801414457 on 1.7.1994 from LIC''s Branch office at Kovuru and the complainant was nominee under the policy. Rambabu suddenly died on 21.2.1997 due to some heart disease at Sarada Nursing Home, Bhimavaram. THE complainant immediately informed the opposite parties and submitted the necessary documents to the first appellant. After a number of represenations he was informed by the first appellant through his letter dated 28.8.1997 to make further correspondence to the Branch Office at Tadepalligudem. Subsequently he received reply dated 8.9.1997 stating that his claim was under consideration at the Divisional Office. On 16.9.1997 he was inforned that the appellants needed some more time and asked him to wait. He then filed his complaint before the District Forum on 10.11,.1997, requesting direction to the opposite party to pay the policy amount with interest and costs. The complainant also filed his affidavit before the District Forum stating that originally he asked for only policy amount of Rs. 1 lakh but in the affidavit he asked for bonus and other benefits as per the policy. He also asked for 24% interest on the said amount from the date of the complainant and costs.

The appellants in the counter before the District Forum denied all the allegations made in the original complaint. However, they accepted the policy and that Rambabu nominated the complainant as his nominee. But they contested the contention that Rambabu died suddenly on 21.2.1997 due to some heart disease at Bhimavaram and that after his death the complainant submitted the claim form. They alleged that the respondent approached the Forum without waiting for the final decision of the L.I.C. while the matter was under investigation, that the appellant was aware of it and that the Forum had no jurisdiction to entertain the complaint as it was premature.

THE appellants further stated that the policy was taken by Rambabu on 27.9.1994 and that it was an endowment policy for 25 years and that it lapsed due to non-payment of premium in time and that it was revived on the strength of personal statement of health by Rambabu on 29.1.1996. It was alleged that while reviving the policy Rambabu did not disclose that he was having heart ailment from which he was suffering since long time. It was further alleged that Rambabu died on 21.2.1997 but intimation was given to the appellants on 8.3.1997 and the claim form was submitted on 25.7.1997 at Tadepalligudem of LIC Branch. THEy further stated that Rambabu died within one year and 22 days from the date of revival of the policy and, therefore, the claim had to be investigated. THE appellants did not repudiate the claim of the complainant since it was still under investigation. THE appellants further alleged that "deceased died due to Rheumatic heart and Mitral stenosis", that there was no failure of contractual obligations or any deficiency of service and requested the Forum to dismiss the case. The District Forum observed that the appellants could not prove that Rambabu was suffering from any heart ailment prior to taking the policy or before revival. It did not furnish the original application or the claim form, nor did it repudiate the policy and, for the first time, it produced Ex. B4, a letter written by K. Maheswara Rao, P.M.P.

THE District Forum observed "for the first time, without any basis in the written statement, the opposite parties filed Ex. B4 letter dated 11.6.1997 of one K. Maheswara Rao, PMP of Gandhinagaram to the effect that the deceased was taking treatment from him since one year prior to his death. THE PMP does not know even Telugu properly. THE place of residence or the clinic of the said PMP is not noted in Ex. B4. It is not known in which town or village the said Gandhinagaram is located". THE District Forum, therefore, did not accept Ex. B4 filed by the appellant as genuine and directed it to pay Rs. 1,00,000/- to the complainant together with accrued benefits and interesat @ 18% from 21.2.1997 and also costs of Rs. 5,000/-. The points to be considered are whether the appellants are right and whether Rambabu was aware of his heart ailment prior to taking the policy or atleast before its revival in January, 1996 and on that ground the claim had to be repudiated, or the deceased was not aware of his ailment and, therefore, the policy was valid and the complainant was entitled to the claim. We have to see whether the policy really lapsed as alleged by the appellant and was revived only one year 22 days before his death. The respondent filed Exs. A1 to A11 and the appellants filed Exs. B1 to B4. Ex. A4 is same as Ex. B2 and is the medical attendant''s certificate. Ex. A6 is same as Ex. B3 and it is certificate of hospital treatment. Ex. B1 is the claim enquiry report which mentioned about Sri K. Maheswara Rao, PMP who gave his report (Ex. B4). The District Forum did not accept Ex. B4 which was produced subsequently on 8.7.1998. The so-called medical practitioner did not even know the correct spelling of the medicines he was supposed to have prescribed for the deceased while Rambabu was under his treatment for one year and in our view District Forum rightly rejected Ex. B4. The claim enquiry report (Ex. B1) which was also produced on 8.7.1998 before the District Forum does not bear any date. In column No. 12 Sri K. Maheswara Rao, PMP is subsequently mentioned as RMP and that being a small village there was no qualified doctor. Column 34 shows "Claim may be admitted after obtaining the treatment particulars from Sarada Nursing Home, Bheemavaram". It was signed by P. Vykunta Rao, Branch Manager, T.P. Gudem (appellant No. 2). Ex. A4/B2 is the medical attendant''s certificate, and it gives the age of Rambabu as 23 years and primary cause of death as "Rheumatic Heart Mitral Stenosis". Clause B shows "Inferred from symptoms and appearance during life" and Clause C shows that he was suffering from last one year and the symptoms were breathlessness and palpitation and that he was treated by the attendants from 20.2.1997 upto his death on 21.2.1997. He had sober habits. In Ex. B3 which is also Ex. A6 i.e., certificate of hospital treatment under 3rd column it is written that Rambabu was not referred by any doctor and the patient directly came to the hospital. Column 4 shows that he was suffering from "breathlessness with palpitation" for one year, that the history was reported by the patient himself. This document is dated 3.4.1997. The patient died on 21.2.1997 at 9-00 p.m. However the appellant did not file the original policy or the application for its revival and the claim form.

EX. A1 dated 17.11.994 is the policy and A2 premium receipt dated 1.1.1997 for Rs. 1,978/-. EX. A5 is the claimant statement submitted by the complainant. It mentions that on 20.2.1997 the deceased suffered from severe chest pain. EX. A7 is the death certificate given by Mandal Revenue Officer. EX. A8 is letter from respondent/complainant dated 5.9.1997 to appellant No. 2 informing that he handed over necessary documents to PLP Raju at Kovuru and marked copy to Branch Manager, LIC at Kovur. EXs. A9, A10 and A11 dated 28.8.1997, 8.9.1997 and 16.9.1997 respectively were written by appellant No. 1 and appellant No. 2 informing the respondent that the claim was under consideration.

THE appeal was admitted on 28.10.1998. On 14.12.1998 interim stay was granted. On behalf of the appellant affidavit was filed by Sri A. Krishna Reddy, Assistant Secretary (L and HPF) SC Zonal Office, Hyderabad. In his affidvait he stated that the half yearly endowment policy was issued to Rambabu pursuant to his proposal dated 27.9.1994. Since he did not remit the premium due on July, 1995 the policy had lapsed on 29.1.1996. THE policy was revived basing on personal health statement given by the policy holder. It is stated "While so, the respondent herein informed Corporation on 8.3.1997, that the policy holder died on 29.2.1997. Claim forms were issued on 8.3.1997 and the respondent herein submitted the claim forms on 27.5.1997 alongwith duly filled up B and B1 forms. Form B is the medical attendant''s certificate and Form B1 is the certificate of hospital treatment. Both the certificates show that the policy holder suffered from heart disease, one year prior to his death and he was aware of the same". Mrs. D. Gita filed appearance for the respondent. On her request on 25.10.1999 widow of Rambabu, J. Pedditlu, was also impleaded. On 18.11.1999 we heard Counsel for both the parties and it was reserved for judgment. From the whole discussion we find that the deceased was very young and he had not suffered from any ailment prior to taking the policy. His ailment or the symptoms i.e., breathlessness and palpitations he felt acutely in the last 2 or 3 days before his death and even if we accept that he was not feeling well for last one year there is no certificate by any recognised doctor about his ailment. The hospital report Ex. B3 shows that the patient came directly and was not referred by anybody. Only in Ex. B4 report by PMP Sri K. Maheswara Rao it was mentioned that deceased was suffering from heart ailment and was treated by him. Without any medical qualification we cannot accept the certificate given by such persons. The claim form issued by Sarpanch, Ex. A3 and the claimant statement given by the complainant do not mention that Rambabu was treated by said Maheswara Rao. Ex. A3 also mentions that the Sarpanch had seen the deceased about one month prior to his death, that means he was mobile. Even if the deceased suffered from breathlessness earlier there was no proof that he was aware of the nature of his illness. Exs. A4/B2 and A6/B3 show that he died due to Rheumatic heart disease with "Mitral Stenosis C abnormalities". The Rheumatic heart disease can be both congenital and acquired and in the case of acquired rheumatic heart ailment, Mitral Stenosis is indicated. Either parties were neither examined nor did they give any evidence. No expert opinion was solicited. The certificate given by PMP, Ex. B4 cannot be accepted on its face value. If a person or Maheswara Rao felt one year back that the deceased had chest pain and the heart valve was not working, he should have immediately referred Rambabu to Bhimavaram Hospital rather than continuing to treat him with the drugs and injections which he could not even spell properly. On that alone we are of the opinion that the appellant should not have accepted it. It is a fact that deceased worked as a coolie and, therefore, if he was suffering from such an ailment since childhood, he could not have performed the manual labour required of a coolie. Therefore, the disease must have been acquired in all probabilities and he would have learnt about the seriousness only when he was diagnosed by doctors at Sarada Nursing Home, Bhimavaram. Therefore, the appellants did not repudiate the policy even after the complaint dated 10.11.1997 was filed with District Forum. The District Forum asked appellants to file written statements on 5.1.1998, but they did not file the same on two subsequent dates. On 20.1.1998 they were set ex parte and after two more dates on 11.2.1998 written statement of opposite party-1 and adoption memo of opposite party-2 was filed where for the first time it was stated that "The main and material allegations made in the complaint are not true and correct and the complaint is not maintainable under law", and alleged that the complainant had approached the Forum without waiting for the final decision of opposite party-1 and, therefore, the District Forum had no jurisdiction to entertain the complaint as it was pre-mature. After 11 months of the death of the complainant for the first time appellants alleged that the policy was not maintainable.

When the Insurance Company insures illiterate and semilliterate people from remote rural areas it had to see that the person is properly checked by its medical officer, so that later on when the person dies or need arises it does not have to conduct enquiries and say that some unqualified medical practitioner (PMP) treated him for one year for Rheumatic heart ailment, since the statement of such a person cannot be accepted. Arguing that at a remote place qualified doctors are not available and hence PMP only treats the people, without referring them to qualified doctors even in serious cases of heart ailment, shows that it has no evidence for repudiating the policy. Appellants also cannot hold the insured responsible for not disclosing his ailment if he was not aware of it specially when he was only a coolie from a remote place. If life insurance is a social benefit scheme it is obligatory on the part of the Insurance Company to educate the insured and make him aware of all the terms and conditions of the policy, including regarding health status at the trime of taking the policy. It has to also see the economic status and whether the party can afford to pay large amounts as premium. Otherwise, when the policy lapses the disadvantaged people lose their small savings also.

THEREFORE, we are of the view that the District Forum was correct in holding that there was deficiency in service on the part of the appellants. Forum directed them to pay to the complainant the sum of Rs. 1,00,000/- and benefits under the policy alongwith the costs. In this we are covered by number of judgments including our own in Secretary, Apolo Health Association, Hyderabad v. Umapada Mandal, Hyderabad, CDA No. 443 of 1993, which was upheld by National Commission. While rejecting the appeal we are also supported by the judgment of Maharashtra SCRC, in New India Assurance Company Limited v. J.A. Mansoor, III (1999) CPJ 30, and our another judgment in United India Insurance Company Limited v. Ilaiah, FA No. 1036 of 1996. We, therefore, reject the appeal and uphold the judgment of the E. Godavari District Forum. Since widow of the deceased has also been impleaded as respondent No. 2 alongwith father of the deceased, the amount shall be paid by two cheques of equal sum in the name of the two respondents. The amounts deposited before this Commission shall be paid accordingly to the two respondents. They may file cheque petitions accordingly. Appeal dismissed.