Life Insurance Corporation of India vs KAMLA DEVI

-THESE are two cross-appeals against the judgment and order dated 7.3.2003 passed by District Forum, Almora in Case No. 48 of 2002, Kamla Devi v. LIC. The learned Forum partly allowed the complaint and directed the opposite party to pay only the amount deposited by the insured. Against this order, the Life Insurance Corporation of India has filed an appeal. On the other hand, the maturity value of the policy was not given to the complainant. Against this, the complainant has also filed an appeal. Since, both the appeals arise out of one judgment and order, therefore, both are taken together for disposal. A copy of this judgment shall be placed in the records of both the files.

THE brief facts of the case are that the complainant Smt. Kamla Devi is the widow of Shri Anand Singh, who was insured for a sum of Rs. 50,000/- on 29.8.1998 and for a sum of Rs. 1,10,000/- on 23.7.2000. It is said that the premium was paid from the salary. It is not disputed that premium has not been paid. THE insured Shri Anand Singh was a teacher in Rajkiya Inter College, Chowdda and he died on 21.2.2001 all of sudden. THE complainant is his nominee, therefore, she lodged a claim with the Insurance Company, but her claim was repudiated. THErefore, she filed a complaint. The opposite party contested the complaint and alleged that the insured was an old patient of tuberculosis. He has knowingly suppressed this fact and he died out of tuberculosis. It is alleged that for this reason, the complaint has rightly been repudiated.

The only point in dispute is whether the insured was an old patient of tuberculosis. The learned Counsel for the complainant referred the ruling in Gangamma v. Senior Divisional Manager, LIC of India, I (1995) CPJ 388, and argued that it is burden on the Insurance Company to prove about false representations and suppression of facts. The same thing is said in the ruling in Senior Branch Manager, LIC of India v. Boddepalli Ramarao, III (1994) CPJ 222, that without inquiry that the deceased has suffered tuberculosis, the claim could not have been repudiated.

THE ruling in Smt. Alia Begum v. LIC of India, III (1997) CPJ 106 (NC), is also on the same ground that without proper evidence by the Insurance Company, the claim cannot be rejected. All other rulings referred by the complainant are on the same facts that burden of proof is on the Insurance Company. Without proper evidence, no such rejection order can be passed. We are in full agreement with the above rulings. There is definite allegation of the Insurance Company that there was inquiry, there was definite evidence and all such evidence has been produced in this case.

IT is admitted that the deceased was in the service of the school and no greater evidence can be possible than the evidence from the school, itself that the insured was suffering from tuberculosis. Not only this, there is definite certificate from the school that the insured was hospitalised from 30.10.1995 to 20.2.1996 for 114 days and again on 10.4.1996 to 8.6.1996 for 60 days. The certificate has been issued by the Principal and he cannot be disbelieved. In the proposal form of insurance, definite information is to be given whether the insured has been ill from any disease in the last 5 years and he has been hospitalised for more than a week in that connection or not. In the proposal form, the insured has written ''No''. The insurance policies are of utmost bona fide and good faith. The insured was a teacher and, at least, it was not expected of him to have falsely represented that he was never ill and hospitalised. He suppressed the material fact of his dangerous disease, which ultimately resulted in his death. Although the complainant has merely written that the insured died all of a sudden, the cause of death has not at all been written in the complaint. In these circumstances, there was definite evidence of the opposite party. There was no reason to disbelieve that evidence and, therefore, the claim has rightly been repudiated and the appeal of the complainant is to be dismissed for the maturity value of the policy. In the above circumstances, the ruling in LIC of India v. Smt. Asha Goel, I (2001) SLT 89=AIR 2001 SC 549, shall not apply to the facts of the present case because the claim has not been repudiated in mechanical and routine manner. Every inquiry has been made. There is no purpose of law that if there is insurance, there may be every suppression, every non-disclosure of material facts and any fraud, but the claim must be given to the claimant in the case of the death of the insured. The judgment of this Commission in Senior Branch Manager, LIC of India v. Smt. Ravi Jain, 2003 (1) UC 198, was referred. In this ruling there was merely repudiation on the ground that there was a prescription of Rs. 140/- for disease of cough and pain. The illness like seasonal cold and fever is not a material fact and, therefore, on that ground, claim cannot be repudiated. This ruling also is not applicable to the facts of the present case. As regards the appeal by the Insurance Company, the learned Forum has directed to pay the amount deposited by the deceased. The contract of insurance is void, if material fact is not disclosed. It is not unlawful. Under the provisions of Section 65 of the Contract Act, any person who has received any advantage under an agreement of contract is bound to restore such advantage or to make compensation for it to the person who has received it. The ruling in Kuju Collieries Ltd. v. Jharkhand Mines Ltd., AIR 1974 SC 1892, referred by the learned Counsel for the Insurance Company, wherein it was held that when the parties knew at the very outset that the agreement was not lawful and void and there was no contract at all and nothing was discovered subsequently that the contract is void, Section 65 shall not apply. Section 65 of the Contract Act may or may not apply, but the insured had deposited a handsome amount, deposited the premiums under a void agreement. The agreement is not unlawful. The equity justice and good conscience say that it should be refunded to the complainant. This is a welfare society and in a welfare state, the Insurance Company is to help the legal representatives of the deceased in their crisis period and not to even digest the deposits made by them on technical and legal grounds. The appeal of the Insurance Company is also fit to be dismissed. ORDER Both the appeals are, hereby, dismissed. Cost of the appeals shall be easy. Appeals dismissed.