KUSUM LATA JAIN vs Life Insurance Corporation of India

THIS revision petition has been filed by Kusum Lata Jain (hereinafter referred to as the ''Petitioner'') being aggrieved by the order of the State Consumer Disputes Redressal Commission, U.P. (hereinafter referred to as the ''State Commission) in which the Life Insurance Corporation of India was the Respondent.

THE complaint filed by the Petitioner before the District Forum was that her late husband Ashok Kumar Jain (hereinafter referred to as the (insuree'') had taken a life insurance policy from the Respondent/Corporation for a sum of Rs. 2 lakh from 19.10.1997 and that the yearly premium was being regularly paid. The insuree suddenly fell ill with jaundice and was admitted in Dhanwantri Hospital, Meerut where he expired on 24.6.2001. The Petitioner, thereafter filed a claim being the nominee of the insuree which was repudiated by the Respondent/Corporation vide its letter dated 29.1.2002 on the ground that the deceased/insuree had concealed information/furnished wrong answers in the insurance proposal form in respect of specific questions pertaining to his pre-existing diseases and consumption of alcohol by replying in the negative. Since this was factually not correct, Petitioner served a notice to the Regional Zonal Manager of the Respondent/Corporation and stated that except for bleeding piles, her late husband did not suffer from any pre-existing disease nor did he take alcohol but she received no response. Petitioner, therefore, filed a complaint before the District Forum on the grounds of unfair trade practice and deficiency in service and requested that the Respondent/Corporation be directed to pay the Petitioner, Rs. 2 lakh with other benefits along with interest @ 18% per annum, Rs. 50,000 on account of harassment and mental agony and any other relief which the Hon''ble Forum may deem fit.

THE above contentions were denied by the Respondent/Corporation who stated that in the medical history of the deceased/insuree which is on record clearly indicated that he was a habitual alcoholic due to which he suffered from alcoholic liver disease and related diseases like high blood pressure, jaundice, etc. to which he eventually succumbed. On the other hand, in the insurance proposal form, insuree had replied in the negative to queries whether he suffered from ill health, consumed alcohol, etc. Since an insurance policy is a contract between two parties based on utmost good faith, Respondent/Corporation rightly repudiated the claim.

THE District Forum after hearing both parties accepted the complaint by observing that the medical history of the deceased/insuree on the basis of which the claim was repudiated does not anywhere state that he had any pre-existing disease or chronic liver problems. On the other hand, as per this report, the Respondent was suffering from jaundice, abdominal distention, Haemetemisis, etc. for "about a month". Regarding the alcoholic liver disease no date as such was given pertaining to its duration. The only pre-existing disease stated in this medical certificate is bleeding piles. The District Forum also observed that apart from this policy, the deceased/insuree had also taken other policies from the Respondent/Corporation and each time he was examined by the doctors of the Respondent which did not indicate that he had any pre-existing disease. The District Forum therefore, directed the Respondent to pay the Petitioner, Rs. 2 lakh with interest @ 12% from the date of repudiation of the daim within one month and Rs. 5,000 as litigation cost.

AGGRIEVED by this order, Respondent filed an appeal before the State Commission which allowed the same by observing as follows: "The certificate of hospital issued by Dr. G.P. Elhance is also filed before us, in which at the time of admission, jaundice, Haemetemisis, Abdominal distention was shown and it is mentioned that he was habitual of alcohol and the disease of Abdominal distention from last one month. Column-6, which is most important, which disclose the Alcoholic Liver Disease and other disease is Bleeding Piles and this certificate issued by Dhanwantri Hospital. Another Medical Attendant Certificate in which the death was show on 24.6.2001 at about 6.30 a.m. and the reason was mentioned Liver failure due to Alcoholic liver Disease and Haemetemisis .......... It is also mentioned in that certificate that ''he (insuree) himself admitted to me (the doctor) that he consumed alcohol for more than a decade." Liver takes time for its damage due to alcohol and as the insurance holder has stated that he is using alcohol for more than 10 years and above said disease was due to heavy intake of alcohol. However, he has clearly stated in the information given on 17.10.1997 in the proposal form that he was not suffering from any disease, the condition of his health was good and also narrated that he does not use alcohol and such type of things. Besides this, the certificate of declaration of good health issued on 14.11.2000 is incorrect. In view of this, the repudiation of Life Insurance Policy is correct that he has obtained the policy by cheating."

Hence, the present revision petition.

COUNSEL for both parties made oral submissions. Counsel for Petitioner stated that the State Commission erred in accepting the appeal of the Respondent on a medical attendant''s certificate dated 24.6.2001 that the deceased himself had admitted that he had been consuming alcohol for more than a decade and suffering from liver disease for about a decade and that the cause of his jaundice and related ailments are as a result of this excessive alcohol consumption. This document in fact was never produced before the District Forum and was handed over to the State Commission without making a request for filing additional evidence as a result of which Petitioner was not even given an opportunity to examine/challenge the statement with adequate proof. On the other hand, the medical certificate of Dr. Elhance which was in evidence before the District Forum did not give any such finding and merely stated that the insuree had been suffering from jaundice, abdominal distention, etc. for about a month i.e. well after he had taken the insurance policy. Further, there is no mention whatsoever that apart from bleeding piles, the insuree had any other pre-existing disease. The State Commission, therefore, erred in relying on an evidence which was clearly inadmissible.

COUNSEL for Respondent on the other hand, stated that as observed by the State Commission liver diseases take time to develop and even the report of Dr. Elhance which was in evidence before the District Forum clearly states that insuree had alcoholic liver disease.

WE have heard learned Counsel for both parties and have carefully gone through the evidence on record. It is a fact and not denied by the Respondent that the evidence on which the State Commission has essentially based its findings was not filed in the prescribed manner and was handed over "across the table" without any application to file the same and most importantly without giving the Petitioner an opportunity to challenge it. In view of this, we are unable to accept this as admissible evidence, in deciding the revision petition. The only credible medical evidence is the report of Dr. Elhance who had treated the insuree prior to his death. We have carefully perused this document and note that there is no finding that the insuree had suffered from any pre-existing disease (except bleeding piles) which was more than a month old i.e. prior to his admission in the hospital with jaundice and related problems because of which he expired. While it is a fact that alcoholic liver disease was stated in this medical report, there is no mention of the duration of the said problem. In the absence of this and taking into account the rest of the report of Dr. Elhance, we are not convinced that the insurance claim filed by the Petitioner was justifiably repudiated. The State Commission erred in reaching its findings based on inadmissible evidence. In view of this, we set aside the order of the State Commission and restore the order of the District Forum with the following modification. The Respondent is directed to pay the Petitioner, Rs. 2 lakh with interest @ 9% from the date of repudiation of the claim within one month and Rs. 5,000 as litigation cost. Revision Petition allowed.