Divisional Manager, Life Insurance Corporation of India vs Sajeda Bano

THIS appeal under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 2.5.2001 of the District Consumer Disputes Redressal Forum, Raipur (hereinafter called as ''District Forum'' for short), in Case No. 403/1999 awarding the assured amount of Rs. 30,000/- with interest @ 12% per annum thereon, in favour of the complainant/respondent herein.

RELEVANT facts no longer in dispute are that the deceased husband of the complainant/respondent Ramzan Ali obtained Life Insurance Policy on 28.8.1996 for the sum of Rs. 30,000/-. The policy was to be in force till 28.8.2011. The policy had lapsed on account of non-payment of half-yearly premium due on 28.2.1998 and 28.8.1998. However, the policy was got revived by the insurer Ramzan Ali by paying the premium due on the policy and also by furnishing declaration dated 28.12.1998 of good health. It is also not in dispute that the deceased was admitted in Ramkrishna Surgical Nursing Home, Raipur on 26.12.1998 and received treatment there but expired on 18.1.1999 due to Cardiatic Respiratory Attack. The complainant/respondent on the death of her husband Ramzan Ali, laid claim for payment of assured amount under the aforementioned policy. The claim was repudiated by the appellant/respondent insurer by its letter dated 7.5.1999, on the ground that the revival of policy was obtained by furnishing false declaration of good health. The complainant in her complaint averred that since the policy was revived, the complainant/respondent was entitled to get the amount from the appellant/insurer. It was also averred that there was no justification for the appellant to repudiate the claim of the complainant/respondent''s, the nominee under the policy.

The opposite party/appellant resisted the above averment of the complainant. According to the appellants, the policy holder was admitted in the hospital on 26.12.1998 and died very shortly after the revival of the policy. It was averred by the appellants/insurer that though deceased Ramzan Ali was receiving treatment at the hospital, yet he furnished declaraion of his good health, on the basis of which the policy was revived. The claim of the complainant was, therefore, repudiated by the appellants.

THE learned District Forum held that the contents of declaration of good health allegedly furnished by the deceased Ramzan Ali were not duly explained to him. It was, therefore, held that there was no material suppression of any fact on the part of the deceased/insured. THE District Forum, therefore, allowed the complaint and awarded compensation of Rs. 30,000/- with interest, as noticed earlier. Learned Counsel for the appellants/insurer reiterated the stand taken in their reply and submitted that the deceased was undisputedly admitted in Ramkrishna Surgical Nursing Home, Raipur and received treatment for "Retro Peritoneal Abscess - Perforation, 2nd part DUO" and died due to Cardiatic Respiratory Attack on 18.1.1999, in the said nursing home. It was also submitted that the policy holder having given a deliberately false declaration of good health and obtained revival of the policy on the basis of the said declaration, there was breach of confidence between the insurer and insured. The appellants/insurer was, therefore, justified in repudiating the claim under the policy.

AS against the above, the learned Counsel for the complainant/respondent support the impugned order. It was contended that the deceased was an illiterate man. The contents of the declaration were never explained to him and he was simply made to put his signature on the said declaration. It has been submitted that the officer or agent of the insurer or any other person did not certify that the declaration was duly explained to the deceased insured, hence the District Forum was fully justified in holding that there was no material suppression of fact by the deceased. The main question that arises for consideration is : as to whether the deceased filled up the declaration and suppressed material facts regarding his health, resulting in revival of the policy ? As the insurer/appellants have alleged that the deceased was guilty of material suppression, it was the obligation and burden of the insurer/appellants to prove the same.

THE declaration alleged to have been furnished by Ramzan Ali has been filed by the appellants in the record of the complaint case. On perusal of the said declaration, it would appear that it bears the signature of Ramzan Ali, deceased insured on the top portion thereof. However, in the lower portion of the said declaration, there is a certificate appended which is to the following effect. "I hereby declare that I have fully explained the meaning of the above declaration to the Life Insured."

THE declaration as above should be furnished by the person filling in the form and should be signed by him as would be evident from the perusal of the said declaration form. However, signature etc. of any person has not been put on the said declaration which would have indicated that the contents of the declaration of good health were duly explained to the deceased, before obtaining his signature. It is thus evident from the contents of the said form that normally the declaration was expected to be filled up by the deceased in the presence of the officer of the insurer/appellants or its agent or some other responsible person. Thus, the appellants should have taken care and should have insisted upon the certification by the person filling up the form that the contents of declaration of good health were duly explained to the deceased/insurer. In the absence of such a certification by the person filling up the form, the said declaration of good health should not have been accepted and the appellants should have refrained from reviving the policy. However, this has not been done so by the appellants in the instant case and the policy has been revived despite the lacuna in the declaration form as above. In the circumstances, it is obvious that it has not been establised that the deceased insurer was explained or had knowledge of the purport and import of the declaration under which he is supposed to have put his signature. Merely, by putting his signatiure on the dotted lines, the deceased cannot be said to have made the declaration typed in the form. Thus, it appears that there was no conscious declaration by the deceased insured. That being so, he cannot be held responsible of material suppression of facts.

It may also be noticed in the above context, that had the insurer been careful and alert it could have easily come to know that the deceased was already admitted in the hospital while he sought revival of the policy. They could, therefore, have avoided revival of policy. It however, appears that appellants failed to exercise due care and caution and have chosen to revive the policy. They cannot, therefore, turn around and repudiate the policy on the pretext of material suppression of facts by the deceased/insured.

ACCORDINGLY, the District Forum was justified in upholding the contentions of the complainant/respondent and awarding her damages. No interference in the impugned order is called for. This appeal has no merit and is accordingly dismissed. The appellants shall bear their own costs and shall pay that of the complainant/respondent which is quantified as Rs. 1,000/- (One Thousand only). Appeal dismissed.