Life Insurance Corporation vs SHRI BHAGWATI PRASAD

THIS is an appeal against the order dated 31.7.1995 passed by District Consumer Disputes Redressal Forum, Satna in their Case No. 167/1994, wherein the Forum has ordered the opposite party i.e. the appellant LIC to pay to the complainants Rs. 25,000/- being the sum assured in his LIC policy No. 370167825, alongwith 18% p.a. interest on this amount, till payment.

THE grounds for appeal are as under: (i) That the deceased insured had withheld material information regarding his health by giving wrong answers to Q. Nos. 15(k) and 16 of the proposal whereas he was a known case of Epilepsy for 10-12 years and hence the appellant had rightly repudiated the claim. (ii) That the District Forum failed to see that the respondent No. 2 had no locus standi as she was neither a nominee nor did she produce any succession certificate to show that she was legal heir of the deceased.

Heard the arguments of both the parties and perused the records of the case.

So far as the second argument of the appellant is concerned we accept this contention that respondent No. 2 (applicant No. 2 before the Forum) Smt. Sushma Shriwastava has no locus standi as she is neither a nominee nor has she produced any succession certificate indicating that she is a legal heir. Complainant No. 1 Shri B.P. Shriwastava, father of the deceased insured is the nominee as recorded in Ex. P-4.

SO far as this argument of the appellant is concerned that the deceased insured was a "known case of Epilepsy for 10-12 years", we find that there is absolutely nothing on record except certificate of hospital treatment dated 23.4.1991 (Ex. D-2 Cin support of this contention. The appellant''s own witness Shri A.C. Ghosh Administrative Officer LIC has admitted that they have no other source of information except this certificate. He has further admitted that the basis for repudiation is this certificate only. Though this certificate was obtained on 23.4.1991 and letter of repudiation was issued on 31.3.1992, still as per admission of Mr. Ghosh in his cross- examination, the appellant did not make any enquiries from anywhere about the health of the deceased insured for eleven months when according to admission of Mr. Ghosh this certificate is not a "medical certificate". We find that this certificate mentions only as under and nothing else beyond this, which is LIC''s basis for repudiation. Question Answer 7(a) History reported. Pt. was known case of Epilepsy. 7(b) States when first observed. 10-12 years.. 7(c) By whom treated. Not known as per record 7(d) By whom history was reported, By father (patient was unconscious). 7(e) By whom the history was noted Dr. D.K. Pal. and recorded.

WHEN admittedly, it was not a "medical certificate" and no details about history of epilepsy, or treatment taken etc. were recorded in this certificate an enquiry from other sources also should have been made for confirmation. More so because certificate is not issued by the doctor, who recorded history. The surgeon who issued this certificate had no personal knowledge. No enquiry was made from Dr. D.K. Pal. The very purpose of Q. 5(c) in form No.3816 (claim from B-l) is that an enquiry may be made from that doctor who recorded history or who can be cited as a witness if required. Q. No. 5(c) is as under: "Is the doctor, to whom the history was reported/who had recorded the history, still with the hospital/and if not, what is his present address". According to the reply as recorded "Yes, Dr. D.K. Pal was still in the hospital and could have been contacted. Dictionary meaning of word "Known" is "generally recognised as being stated, or publicly "known". When no enquiry at all was made how can it be said to be "known" case of Epilepsy. How the doctor, who did not record history has written word "known" is not known. And how could the doctor who recorded the history stated by only one person, use the word "known" is beyond our comprehension, if so recorded by him. What is still more important is that insured''s father gave a statement on oath before the Forum in his cross-examination, that he gave no statement before any doctor, no doctor enquired anything from him and that it is wrong to say that his son was an old patient of Epilepsy. When insured''s father had given such a statement, what is the evidentiary value of Ex. D-2-C (Hospital treatment certificate) is a matter for consideration. It is not a medical certificate. It is not based on personal knowledge of the person who issued it. Why the Registrar who issued this certificate was not examined as witness. Why Dr. D.K. Pal who recorded deceased''s father''s statement, as case history, was not examined as a witness. Why was not copy of case history recorded by Dr. Pal produced in the Court. Why was not any witness produced and affidavit furnished in rebuttal of the statement of deceased insured''s father. Mr .B .P. Shriwastava''s statement was recorded on 9.3.1995. Two hearings involving four months'' time were given to the appellant for adducing evidence. But no evidence was produced in rebuttal. The contents of the hospital certificate have also not been supported by any affidavit. The LIC has stated in its repudiation letter that they hold INDISPUTABLE PROOF to show that the deceased insured suffered with Epilepsy for nine years or more. We fail to understand as to how this "certificate" alone was believed to be "INDISPUTABLE PROOF ", when by statement on oath, the insured''s father has challenged its contents. INDISPUTABLE means "too certain to be questioned" or "beyond doubt". The facts and circumstances of Appeal No. 169 / 1995 decided by this Commission were quite different from the present one. That case had indisputable medical certificate of treatment for Epilepsy. As such the citations of that appeal brought to our notice are not applicable in this case.

SINCE the insured died within two years of taking the policy, only this much was to be seen whether the deceased had made inaccurate statement in the proposal but the LIC failed to conduct even this enquiry properly and slept over the certificate of hospital treatment for more than eleven months, without further conducting any enquiry whatsoever and issued repudiation letter on 31.3.1992 after more than two years of taking the insurance policy, knowing fully well that according to Section 45 of Insurance Act, 1938, no policy can be called in question on the ground of mis-statement only after two years. Section 45 applies to every case where repudiation is made after more than two years from the date on which policy becomes effective, irrespective of whether the insured died before the expiry of two years or not. (AIR 1973 Delhi 180, following AIR 1962 SC 814). This is additional point for consideration in the instant case that as a result unnecessary delay in disposal of the claim provisions of Section 45 are also invoked.

HOWEVER, since the burden of proof, to establish even mis-statement lay heavily on the appellant, which they failed to discharge totally, the appeal is hereby dismissed with this modification in the order of the District Forum that the amounts etc. ordered to be paid by the Forum shall be paid only to the nominee Shri B.P. Shriwastava-complainant No. 1 and appellant shall further pay Rs. 500/- to the complainant No. 1 as cost of the se proceedings. Appeal dismissed.