LIC OF INDIA vs BRAHAM SINGH

Ajit Bharihoke, Presiding Member

[1] This revision is directed against the order of the Haryana State Consumer Disputes Redressal Commission, Panchkula (in short, "the State Commission") dated 1.10.2008 whereby the State Commission dismissed the appeal preferred by the petitioner/opposite party against the order of the District Forum, Sonepat.

[2] Briefly stated facts relevant for the disposal of the revision petition are that Shri Ajmer Singh (since deceased) obtained from the opposite party LIC policy dated 30th March, 2002 for Rs.10 Lakhs. In the proposal form, in response to question No.11 seeking information as to whether Ajmer Singh had ever received treatment or undergone medical test in connection with Hepatitis B or an AIDS related condition, Ajmer Singh replied in the negative. Ajmer Singh died on 28.2.2003. The complainant being the nominee in the insurance policy filed an insurance claim. The claim, however, was repudiated and the respondent/complainant was informed vide letter dated 4th September, 2002 that the insurance policy was cancelled by the petitioner, during the lifetime of the insured Ajmer Singh. Being aggrieved of the repudiation of claim the respondent approached District Forum, Sonepat.

[3] The petitioner/opposite party in its written statement admitted that on the basis of proposal form submitted by Ajmer Singh insurance policy No.173023162 was issued in favour of late Ajmer Singh. However, the said policy was duly cancelled during the lifetime of Ajmer Singh on 4th September, 2002 as enquiries revealed that the insured was suffering from AIDS prior to taking the insurance policy. It is pleaded that before cancelling the policy a show cause notice dated 9th August, 2002 was issued to the deceased Ajmer Singh who in his response had admitted that he was suffering form AIDS.

[4] Shri Anil Hooda, Advocate for the respondent on the contrary has argued in support of the impugned orders. He has contended that there is no cogent evidence to show that Ajmer Singh had admitted that he concealed that he was suffering from AIDS at the time of obtaining the insurance policy. It is argued that counsel for the petitioner is misreading admission in the letter of Ajmer Singh, which was received in the office of the Senior Divisional Manager, LIC, Karnal, Haryana dated 27th August, 2002.

[5] We have considered the rival contentions and perused the record. The short point which needs consideration in this revision petition is whether the insured obtained the insurance policy by concealing the material fact that he was already suffering from AIDS and whether the insurance contract was cancelled because of said reason during the lifetime of the insured.

[6] In order to find answer to this question, it is necessary to have a look on certain documents produced before the District Forum. On perusal of the proposal form we find that in response to question No.11 pertaining to the personal history of the insured the insured denied having received treatment for AIDS or having undergone test in that connection. On perusal of letter dated 9th August, 2002 addressed by the Manager (Claims), LIC of India, Guhana Office to the insured we find that vide this letter the petitioner insurance company called upon the insured Ajmer Singh to submit his response to their letter, which reads as follows: - "It has come to our knowledge that you have been suffering from AIDS & you did not disclose the same while proposing for insurance under above policy. Please give your observations why the risk under above policy should not be cancelled.

Your reply must reach this office within 7 days from the date of this letter."

[7] Admittedly in response to this letter the insured submitted his reply to the office of the insurance company. On perusal of this reply we find that the insured instead of specifically denying that he had not been taking treatment for AIDS prior to applying for insurance, gave a vague reply that he had told about his ailment in detail to the agent without specifying the nature of the ailment. He further stated that the record of his treatment was also not furnished to the agent. This vague reply, in our view amounts to implied admission that before obtaining the insurance policy the insured was suffering from AIDS which fact admittedly has been concealed in answering the questionnaire pertaining to the personal history. Therefore, it can be safely concluded that the insured had obtained the insurance policy by concealment of material fact and as such the insurance contract is not a valid contract.

[8] In aforesaid view, we are supported by the judgments of Hon''ble Supreme Court in the matter of Satwant Kaur Sandhu vs. New India Insurance Co. Ltd., 2009 8 SCC 316 and P.C. Chako vs. & Anr. vs. Chairman, LIC of India,2008 1 SSC 321. It is pertinent to note that after receiving the response of the insured the petitioner insurance company had cancelled the insurance contract vide communication dated 4.9.2002 during the lifetime of the insured which fact stands confirmed from the letter dated 3rd October, 2002 addressed by the insured Ajmer Singh to the Senior Manager, LIC, Karnal (Haryana). From the above, it is clear that the insured had obtained the insurance policy by concealment of material fact and his insurance policy was cancelled during his lifetime for the aforesaid reason. Therefore, the insurance company was justified in repudiating the claim. Foras below have failed to appreciate the evidence narrated above in correct perspective. Therefore, their orders cannot be sustained.

[9] In view of the discussion above, revision petition is allowed, impugned orders of the Foras below are set aside and complaint is dismissed.