LIC OF INDIA vs SURAJMAN DHRUV

THIS appeal under Section 15 of Consumer Protection Act, 1986 arises from the order dated 12.8.2005 in Complaint No. 19/05 by District Consumer Disputes Redressal Forum, Bilaspur (hereinafter called "District Forum" for short) directing the appellant Life Insurance Corporation of India (hereinafter ''LIC'' for short) to pay to the complainant the assured amount of Rs. 42,000 with interest @ 9% per annum.

INDISPUTABLY, the life-assured minor Sunit Kumar Dhruv son of the complainant/respondent had obtained a life insurance policy, in which the complainant was the proposer. The policy covered the risk of life of Sunit Kumar from 28.2.2001 to 28.2.2021. It is also not in dispute that Sunit Kumar died on 23.3.2003 by drowning, while bathing in the river. The complainant claimed the assured amount under the policy on the death of his son Sunit Kumar. As the appellant LIC failed to pay the assured amount, after serving it with legal notice dated 24.6.2004, the complaint was filed by the complainant, in the District Forum.

The complaint was resisted by the appellant. It was averred in the written version that the life assured Sunit Kumar was suffering from epilepsy for the last about 8 to 10 years. However, in the proposal form the complainant as well as his son Sunit Kumar replied in the negative the question in the proposal form, in that regard. It was averred that thus there was suppression of material facts, and therefore the agreement of insurance was vitiated. Hence, no amount under the policy was payable.

DISTRICT Forum in the impugned order observed that the appellant /insurer were under an obligation to get the life assured medically examined before issuing the insurance policy. However, since the appellant/insurer failed to do so, they committed deficiency in service. Accordingly, the complaint was allowed and an amount of Rs. 42,000 with interest was directed to be paid by the appellant/ insurer, as already mentioned above. Learned Counsel for the parties were heard. Record perused.

APPELLANT''s learned Counsel submitted that the documents placed on record clearly disclose that the life assured was suffering from epilepsy, much prior to the submission of proposal form by him, in which the present complainant-his father was the proposer and has signed the said proposal form, in that capacity. It was submitted that thus there was deliberate suppression of material facts, regarding the state of health of the deceased insured; which amounts to fraudulent suppression. It was therefore submitted that as the facts as above were fraudulently and knowingly suppressed by the complainant, the agreement evidenced by the policy issued by the appellant, cannot be enforced by the complainant. The learned ounsel for the complainant as against the above submitted that the appellant/insurer were under an obligation to prove that there was fraudulent suppression by the policy holder or the complainant, which they have failed to do. It was submitted that appellant have failed to place on record relevant material. The learned counsel relied upon the decision of NCDRC in Senior Divisional Manager, Life Insurance Corporation of India & Ors. v. Smt. J. Vinaya, I (2003) CPJ 50 (NC). In the said case, the provisions of Section 45 of the Insurance Act were considered. Decisions of the Supreme Court in Mithoolal Nayak v. Life Insurance Corporation of India, AIR 1962 SC 814, as well as in Life Insurance Corporation of India v G.M. Channabasamma, (1991) 1 SCC 357, wherein it was observed that in case of fraudulent suppression of material facts the policy stand vitiated were relied upon. It was also observed by the National Commission that burden of proving that insured made false representation and suppressed material facts was undoubtedly on Life Insurance Corporation of India. Reliance was also placed by learned Counsel for the respondent to the decision of NCDRC in Life Insurance Corporation of India v. Smt. Promila Malhotra, I (2004) CPJ 91 (NC), in which it was observed that the onus of proving that information given in the proposal form was inaccurate was on the insurer. It is undoubtedly the appellant/ insurer in order to avoid the liability under the policy, were under an obligation to prove that there was fraudulent and deliberate suppression of material facts by the complainant or his minor son the life assured. It has therefore to be considered, as to whether the appellant has placed adequate material to discharge its burden as above ?

THE proposal form was submitted by the life assured and the complainant as proposer. THE perusal of the said proposal form would disclose that the complainant as well as his son has replied in the negative the question in column No. 13 (e) of the proposal form to the effect as to whether the life assured was suffering from inter alia epilepsy. THE copy of the said proposal form indicates that the complainant as well as his son Sunit Kumar signed the said proposal form, at the relevant places which indicates that they have specifically admitted that they have put their signatures thereon, after understanding the full purport and meaning of the questions.

IT may further be noted that the death of Sunit Kumar was reported by one Buldev Singh who went to Police Station Akaltara and reported that Sunit Kumar son of complainant Shri Surajman Dhruv, died due to drowning, while he was bathing in the river. IT was also stated that the said Sunit Kumar suffered from epilepsy from 1982 i.e. much prior to the date of death as well as the date of issuance of policy in the year 2001. In the Panchnama of dead body also, which was prepared by the police, signed by independent persons of the locality; it was mentioned that the deceased Sunit Kumar was suffering from epilepsy for the last several years. The above fact was also mentioned in the requisition requesting for post-mortem of the body, as well as in the post-mortem report. The copies of aforesaid public documents are placed on record. The said copies are the police papers and relate back to the time, immediately after the death of the deceased. There is nothing on record to show that the said documents were in any manner doubtful. The matter appears to be reported by independent persons, at whose instance, report was recorded by the police. The said documents have not been challenged by the complainant. In the absence of any challenge to the said documents and there being no other reason to doubt the origin or the authenticity of the said documents, the same cannot be ignored or disregarded.

It would therefore appear from the said documents of unimpeachable origin that the deceased Sunit Kumar suffered from epilepsy for a long time. The said fact however was suppressed and the question in that regard was replied in the negative not only by the life assured but also by the complainant-his father as proposer, for obtaining the said policy. In the circumstances, it is clear that there was deliberate suppression of material facts regarding real state of health of the deceased Sunit Kumar. This fraudulent suppression would certainly vitiate the policy. Therefore, the complainant would not be entitled to benefit under the said policy.

IN view of the above, it would be clear that repudiation of the complainant''s claim was not without foundation or justification. As it appears that the repudiation was after due application of mind and as it was not lacking bonafide; hence such repudiation would not amount to deficiency in service. Reference in the above context may be made to the decisions of the National Commission in Jagdish Prasad Dagar v. Senior Divisional Manager. LIC, II (1992) CPJ 493 (NC); Marketing Manager, LIC of INdia v. Smt. S. Vijaya, I (1995) CPJ 122 (NC) and LIC of INdia v. Smt. Lily Rani Roy, I (1997) CPJ 46 (NC)=1997 (1) CPR 40. The District Forum was not justified in observing that the deceased Sunit Kumar should have been got examined by the appellant/insurer before issuing the insurance policy and having not done so, they are guilty of deficiency in service. It may be mentioned, that the contention as above was neither raised, nor appears to be relevant in the circumstances of the case discussed above. As noted above, the facts and material placed on record go to show that the life assured Sunit Kumar was got insured by knowingly and deliberately making false statement and deliberately furnishing wrong information to the appellant/insurer. The policy agreement therefore stands vitiated.

CONSEQUENTLY, the impugned order directing that the assured amount under the policy, with interest be paid by the appellant/ insurer to the complainant/respondent deserves to be set aside and is hereby set aside. The appeal is accordingly allowed. The complaint stands dismissed. Appeal allowed.