Life Insurance Corporation of India vs CHANDRA WATI DEVI

- THIS is an appeal by the Life Insurance Corporation of India against the Order of 13th August, 1991 pronounce by the State Commission of Uttar Pradesh.

ONE, Late Shri Pyare Singh, had taken a Life Insurance Policy for Rs. 2.0 Lakhs from the Life Insurance Corporation of India with effect from 28th December, 1988. Shri Pyare Singh died on 21st April, 1989. The claim of the widow of the deceased for the amount of insurance on the policy was repudiated by the Life Insurance Corporation on the 21st January, 1991. The ground on which the claim of the policy was repudiated was that the cheque of the first premium issued by the insured had been dishonoured and in consequence the policy had been cancelled. According to the Order of the State Commission, the appellant opposite party had failed to substantiate before the State Commission as to when they cancelled the policy. The appellant opposite party also failed to show the State Commission the letter intimating the cancellation of the policy during the life time of the deceased. The finding of the State Commission was that the Life Insurance Corporation of India had wrongly repudiated the insurance claim.

A question also was raised before the State Commission that the insured had submitted the proposal form duly completed on 23rd October, 1988 and that he had not disclosed the fact that he was suffering from "Tumor" called Batari in Hindi. The State Commission after examining the evidence on record, came to the finding that the LIC had not been able to prove that "Batari", as stated in the proposal was one and the same thing as "Tumor", nor had they satisfactorily established that the deceased was suffering from "Tumor". Consequently, the State Commission rejected the suggestion that the insured was guilty of mis-declaration in the proposal form.

AT the hearing before this Commission, the Counsel for the appellant LIC had to concede that claim of insurance on the ground that the first premium cheque had been dishonoured was not correct. He, however, stressed that there was conclusive evidence to establish that there was mis-declaration and concealment of facts by the insured in the proposal form submitted by him in October, 1988. He drew attention to the application of 13th September, 1988 submitted by the insured, Shri Pyare Singh to his superior for sanction of leave from 13th September to 30th September, 1988 on the ground that he had "tumor" on his back and on his neck. Subsequently, by his application of 1st of December, 1988, he sought extension of the leave from 1st of October, 1988 to 30th of November, 1988. This application for extension was in continuation of his previous application for leave and he had stated that he was getting himself treated. This was accompanied by a certificate of medical fitness on 30th November, 1988 stating that Shri Pyare Singh, insured, had been suffering from "tumor" and this had been duly signed by the patient Shri Pyare Singh. The Counsel for LIC reiterated that the term "Batari" used in the Hindi version of the form of proposal for insurance means "tumor". He also contended that, even if this were to be disputed, the proposal form required the proposer to make a declaration whether proposer had been absent from work during the last five years because of ill health or whether during the last five years he had suffered from any ailment necessitating treatment for a period exceeding one week. He had answered these questions in the negative. The Counsel for the respondent was not able to explain satisfactorily these mis-declarations and concealment of fact in the proposal form of the insured.

AFTER considering the entire materials available on record and taking into account the statements at the hearing, we have no doubt that at the time the insured submitted the proposal forms for insurance, he was suffering from tumor and that there was concealment of material facts and mis-declaration in the proposal form which will vitiate the policy of insurance issued by the appellant Life Insurance Corporation of India. In the light of this, the appeal succeeds. The Order of the State Commission is set aside. There is no Order as to costs. Order accordingly.