Life Insurance Corporation of India vs Harminder Kaur

THIS appeal is directed against the order of the District Forum, Ludhiana dated November 7, 1997 granting claim of insurance of Rs. 1 lac with interest at the rate of 12% from the date of claim i.e. 26th May, 1994 till the date of actual payment.

MRS. Harminder Kaur''s husband had a life insurance policy for a sum of Rs. 1 lac and during the operation of that policy he died of accident on 1.3.1994. She, being a nominee, filed a claim with the Life Insurance Corporation - the opposite party but the same was repudiated on the grounds which were wrong, arbitrary, illegal and unjustified by the opposite party vide letter dated 25.2.1997. According to the complainant, the opposite party No. 1 rejected the claim vide letter dated 25.2.1997 stating that the policy was allowed to lapse by non-payment of the premium due 28.3.1992 revived on 6.1.1993 acquiring a paid up value of Rs. NIL and again lapsed due to non-payment of premium due 3/93 and revived on 23.11.1993 acquiring a paid up value of Rs. 21,000/- revived for the full sum assured on the strength of a Personal Statement regarding health, made by the deceased on 30.12.1992 and again on 23.11.1993. The policy was revived during the life-time of the insured Sh. Bhajan Singh Sohi. On the other hand, the opposite parties raised the preliminary objection that the complaint was not maintainable. The present complaint is an abuse of process of law. The repudiation was bona fide after collecting material that the deceased at the time of obtaining the policy had concealed material facts regarding his ill health. Both the parties led their evidence on affidavits and documents, which resulted in passing of the impugned order.

In appeal, the learned Counsel for the appellant Corporation has argued that the contract of insurance is a contract of utmost good faith and the life assured is liable to disclose all the material information about his health at the time of revival of the lapsed policy. In the instant case, the life assured deceased Sh. Bhajan Singh concealed the material facts about his health in his personal statement made at the time of revival of lapsed policy with dishonest and fraudulent intention in order to defraud the appellant-Life Insurance Corporation of India. Bhajan Singh was suffering from nervous disorder and he remained as indoor patient in Doctor Kala''s Nursing Home from 8.11.1992 to 23.11.1992. Bed Head Ticket No. 13506 showed treatment of nervous dis-order. He also took treatment from 15.12.1993 to 24.12.1993. Sh. Bhajan Singh was working in Town Planning Department and he remained on leave from 9.11.1992 to 11.12.1992, 7.5.1993 to 14.5.1993 and 10.12.1993 to 24.12.1993 on account of nervous breakdown and ill-health. The life assured had not disclosed the said disease and hospitalisation, dishonestly and fraudulently in his personal statement regarding his health at the time of revival of policy on 30.12.1992 and 23.11.1993. In his said statement, the deceased Bhajan Singh has declared that he was not suffering from any illness, disease requiring treatment for a week or more. Had the deceased disclosed the true particulars about his health in his personal statement at the time of revival of his lapsed policy, the appellant Corporation would not have revived the said policy. The life assured was, thus, guilty of concealment of material facts about his ill health, therefore, the complaint filed by his nominee (widow) was liable to be dismissed.

WE have heard the Counsel for the parties and have gone through the records. WE find there is no dispute on the factum of death of Sh. Bhajan Singh. There is also no dispute on the preposition of law that if there is a bona fide repudiation of the claim, the L.I.C. cannot be held guilty for deficiency in rendering service. In this case, the learned Counsel for the appellant submitted that there is bona fide repudiation based on material collected hence there is no deficiency in rendering service and the order passed by the District Forum is liable to be set aside. Learned Counsel for the complainant has argued that Sh. Bhajan Singh, deceased was not suffering from any such disease as is alleged by the opposite party in their repudiation letter. Since the opposite party failed to settle the claim within a reasonable period, she filed the complaint before the District Forum. According to the literary meaning as given the Chamber''s Twentieth Century Dictionary, Revised Edition on page 719, the word ''nervous'' has been explained as under : "having nerve, sinewy, strong, vigorous, showing strength and vigour : pertaining to nerves, having the nerves easily excited or weak, agitated and apprehensive, shy in a jumpy state. nervous system, the brain, spinal cord, and nerves collectively." The Concise Oxford Dictionary (the New Edition for the 1990s) on page 796 speaks the meaning of nerve and nervous as under : "nerve - n. 1. a afibre or bundle or bifres that transmits impulses of sensation or motion between the brain or spinal cord and other parts of the body. b the material constituting these. 2 a coolness in danger; bravery; assurance. b colloq. impudence, audacity (they''ve got a nerve) 3 (in pl.) a the bodily state in regard to physical sensitiveness and the interaction between the brain and other parts. b a state of heightened nervousness or sensitivity; a condition of mental or physical stress (need to calm my nerves) 4 a rib of a leaf, esp. the midrib 5 poet. archaic a sinew or tendon. - v.tr. 1 (usu. refl.) brace (oneself) to face danger, suffering, etc. 2 give strength, vigour, or courage to get on a person''s nerves irritate or annoy a person. have nerves of iron (or steel) (of a persone etc.) be not easily upset or frightened. nerve-cell an elongated branched cell transmitting impulses in nerve tissue. nerve-centre 1 a group of closely connected nerve cells associated in performing some function. 2 the centre of control of an organization etc. nerve gas a poisonous gas affecting the nervous system. nerve-racking stressful, frightening; straining the nerves."

"nervous - adj. 1 having delicate or disordered nerves. 2 timid or anxious. 3 a excitable; highly strung; easily agitated. b resulting from this temperament (nervous tension; a nervous headache) 4 affecting or acting on the nerves 5 (foll. by of + verbal noun) reluctant, afraid (am nervous of meeting them) nervous breakdown a period of mental illness, us. resulting from severe depression or anxiety, nervous system the body''s network of specialised cells which transmit nerve impulses between parts of the body (cf. central nervous system peripheral nervous system). nervous wreck colloq. a person suffering from mental stress, exhaustion, etc." According to Black''s Medical Dictionary edited by C.W.H. Havard (36th edition-Jaypee Brothers) on page 476, the meaning of Nerves is as under :

"Nerves : The nervous system consists in part of cells and in part of fibres, each of which is a long process extending from a nerve-cell. The brain and spinal cord are often spoken of together as the central nervous system; the nerves which proceed from them, forty-three on each side, are named the cerebrospinal, or peripheral nerves; whilst the third great division, situated in the neck, thorax and abdomen, and intimately connected with the cerebrospinal nerves (though in its action largely independent of the brain and cord) is known as the autonomic nervous system. The last-named consists of ganglia containing nerve-cells, which are profusely connected by plexuses of nerve-fibres. The nerve-cells originate, or receive, impulses and impressions of various sorts, which are conveyed from them to muscles, blood-vessels, and elsewhere, by afferent nerves, or received by them through different nerves coming from the skin, organs of sense, joints etc. The autonimic system is concerned mainly with the movements and other functions of the internal organs, secreting glands and blood-vessels, the activities of which proceed independently of the Will."

The meaning of Nervous Diseases on page 481 as explained is as under : "Nervous Diseases : This class of disease is one of the most difficult to diagnose. The brain and spinal cord being enclosed in the skull and spine, beyond the reach of direct examination, and the nerves being almost everywhere deeply buried in the tissues, the nature of nervous disease must be made out from the disturbances of organs governed by the affected nerves. The following conditions are discussed under their individual headings : Aphasia; Apoplexy; Brain Disease; Catalepsy; Chorea; Cramp; Epilepsy; Forgetfulness; Hysteria; Locomotor Ataxia; Mental Subnormality; Mental Illness; Multiple Sclerosis; Nerve Injuries; Neuralgia; Neuritis; Paralysis; Pyschosomatic Disease; Spinal Cord, Disease of."

THERE is no evidence on record to substantiate that the assured was suffering in such an aggravated form of this disease loosing his balance of mind that he could commit suicide by jumping into canal and the nervousness was the cause of death. The appellant has not been able to establish that Bhajan Singh was suffering from Nervous Disorder at the time of revival of the policy. Although as per the certificate of Dr. Kala''s Nursing Home, Exs. R-5 and R-7, he had suffered from 8.11.1992 to 23.11.1992 and then again 7.5.1993 to 14.5.1993 but no specific disease has been mentioned which the insured was expected to state in the form at the time of revival of policy. The certificate furnished by the said doctor as aforesaid in R-5 and R-7 showed that Mr. Sohi was fit to resume his duties at the time of discharge from the hospital. Nervous Disorder may state of health on account of any disease as described as above i.e. Aphasia, Applexy etc. THERE is no evidence of the complainant having suffered such a disease. The Counsel for the complainant argued that Mr. Bhajan Singh died on account of accident and not on account of any disease. There is no evidence about the cause of death of Sh. Bhajan Singh. He did not jump into canal for committing suicide by drowning. If the contention of the appellant is accepted that Sh. Bhajan Singh jumped into the canal on his own, due to nervous disorder, it tantamounts to suicide. No such case has been made out. There is no F.I.R. or any other material in this regard on the file. Hence, there is no evidence for that. The contention of the Counsel for the appellant, that Sh. Bhajan Singh committed suicide has no force. Death of the deceased has no nexus between the cause of death and the so called mis-statement of health made in the proposal form. The illness concealed is minor one. The repudiation order passed by the appellant/opposite party "Annexure A" is arbitrary and illegal. Non-settlement of the claim amounts to deficiency in rendering service.

FOR the reasons recorded above, we do not find any merit in the appeal. Consequently the present appeal is dismissed and the order of the District FORum is affirmed. The L.I.C. will also bear costs of litigation which are assessed at Rs. 1,000/-. Appeal dismissed with costs.