LIFE INSURANCE CORPORATION OF INDIA vs Kavita Vinayak

SMT . Kavita Vinayak had filed a complaint under Section 12 of the Consumer Protection Act saying that she is wife of the deceased Rakesh Vinayak who had two policies of L.I.C. of India for the sum of Rs. 50,000/ - and Rs. 1,00,000/ - from 15.5.1988 for 20 years and from 15.2.1994 for 25 years respectively. She had claimed that due to deficiency in service on the part of the respondent, the complainant had suffered great monetary loss, physical harassment and mental agony, besides mental embarrassment at the hands of the respondent for which she is entitled to claim a sum of Rs. 1,50,000/ - being the amount under the claim and also a compensation of Rs. 50,000/ - for the irreparable loss suffered by her. The District Forum -II, U.T., Chandigarh vide its judgment dated 17.5.2000 has allowed the complaint with costs Rs. 1,100/ - and directed the opposite party to pay the amount due to the complainant under the aforesaid policy along with the interest @ 12% per annum from the date the claim was repudiated, i.e. 10.9.1996 till payment. Aggrieved against this order, the respondent has preferred this appeal.

THE respondent/complainant averred in her complaint that her husband late Shri R.P. Vinayak aged about 40 years got two policies of the appellant for getting his life insured. The details of these policies are given below : Sum Assured W.E.F. Plan No. Term Premium Mode of payment Policy No. Rs. 50,000/ - 15.5.1988 75 20 Yrs. Rs. 1,679.30 Yearly 160120167 Rs. 1,00,000/ - 15.2.1994 88 25 Yrs. Rs. 5,429/ - Yearly 1 60814891 She has averred that the appellant Company after getting the detailed medical examination of the insured confirmed that the deceased had told the medical men that he did not suffer from any other disease except T.B. and that he is under treatment and the doctor conducting the medical examination wrote something on the proposal form of medical certificate. The respondent/ complainant had also accompanied the deceased at the time of medical examination when the first policy was got revived in the month of January, 1991 and the deceased had specifically told the doctor attending on him that he was suffering from T.B. ailment and was under treatment, but the deceased or the respondent/complainant could not see what did the doctor enter on the medical certificate of the deceased. The respondent /complainant averred that on 28.12.1994, the insured, Shri Rakesh Vinayak expired at the P.G.I., Chandigarh as a natural death. The death notification form of the deceased is appended as Annexure C -l. It may not be out of place to mention that no autopsy was conducted on the body of the deceased/ insured, and the body was cremated by the relatives of the deceased as per the rituals of the family. The respondent/complainant has further averred that the death of the insured/ deceased was within the period of insurance policy. The respondent/complainant being the nominee lodged the claim of Rs. 50,000/ - and Rs. 1,00,000/ - for both the policies and deposited all the relevant documents and affidavits which were required by the appellant -Company within time. But the appellant -Company did not respond for more than one year and the respondent/ complainant in need of the money of claim visited the offices of the appellant -Company at least 20 times in one year. Ultimately the respondent/ complainant received a letter on 3.7.1996 the copy of which is Annexure C -2 whereby the respondent/complainant was asked to furnish some information which was in the knowledge of the appellant -Company, only to delay the finalisation of the claims. The respondent/ complainant went personally to the office of the appellant -Company and submitted the required medical treatment charts to the appellant - Company. After two months of furnishing the above information and documents to the appellant -Company, the respondent/ complainant received a repudiation letter dated 10.9.1996 copy of which is Annexure C -3 whereby the claim of Rs. 50,000/ - under Policy No. 160120167 was repudiated on the ground of concealing material facts regarding disease suffered by the deceased. Along with this letter, the respondent/complainant also received another repudiation letter dated 10.9.1996, the copy of which is Annexure C -4 whereby the claim of Rs. 1 lac under Policy No. 160814891 was repudiated on the same ground of suppressing material facts about serious ailment of Tuberculosis.

THE respondent/complainant personally went to the office of the appellant -Company and represented at the wrongful repudiation and told them that her husband had specifically informed and submitted the relevant information to the agent and also to the doctor who conducted the medical examination at relevant point of time and also told them that she was accompanied her husband at that time and the appellant -Company should not repudiate the claims of the deceased on this illegal ground, but the appellant -Company refused to hear anything and made the respondent/complainant leave the office of the appellant -Company after facing a lot of harassment and embarrassment at the hands of the subordinate staff of the appellant -Company. The respondent/complainant averred that due to deficiency in service on the part of the appellant - Company the respondent/complainant had suffered great monetary loss, physical harassment and mental agony besides mental embarrassment at the hands of the appellant -Company for which she is entitled to a claim of Rs. 1,50,000/ - being the amount under the claim and also a compensation of Rs. 50,000/ - for the irreparable loss suffered by her. She also vehemently submitted that neither the deceased nor the respondent/complainant had ever suppressed any material facts regarding the health of the insured and if there is any mis -statement in the proposal form it is wholly attributable to either the doctor of opposite party, or the agent who filled the proposal form without the knowledge and consent of the respondent/complainant or the deceased/insured.

THE appellant in its Appeal No. 110 of 2000 repudiated the facts regarding the life insurance policies of Shri Rakesh Vinayak the deceased. It has been averred in the appeal that the Policy of Life Insurance was issued on the basis of proposal and personal statement dated 17.7.1988 submitted by the deceased and believing the averments made therein to be true, which has been annexed as Annexure A -2 with the appeal. It has been further averred by the appellant in the appeal that the Policy of Life Insurance No. 160120167 lapsed due to non - payment of premia due on 15.5.1989 and 11.5.1989. The life assured got it revived on the basis of his personal statement of Good Health dated 8.1.1991 (Annexure A -3). Revival was approved on 8.6.1991 (Annexure A -4) and believing the averments made therein to be true. Another Policy of Insurance on the life of the deceased bearing No. 160814891 was issued by the appellant for a sum assured of Rs. one lac with date of commencement as 28.4.1993 (Annexure A -5) which was issued on the basis of proposal dated 15.2.1994 submitted by the deceased (Annexure A -6) and believing the averments made therein to be true. It is further averred by the appellant that Shri Rakesh Vinayak is reported to have died on 28.12.1994 due to chest infection, etc. (Annexures A -7 and A -8). It has been further averred that the death of the life assured having taken place within a few months of taking out the second policy and within a short period of revival of the first policy being an early claim, investigations reveal that the deceased has not been keeping good health since prior to submission of proposal dated 15.2.1994. It has been alleged that he fraudulently got the policies renewed and concealed the disease he was suffering from, i.e. T.B. However, on reconsideration of the case at higher level, an exgratia payment of Rs. 50,000/ - under the Policy No. 160120167 was offered by the appellant to the respondent by its letter dated 18.12.1996 (Annexure A -13). The respondent filed the complaint before the District Consumer Disputes Redressal Forum -II, U.T., Chandigarh claiming the sum assured with interest, damages and costs and making averments therein that no misstatement had been made in the proposal dated 15.2.1994 and personal statement of good health dated 8.1.1991. Both the parties led evidence by way of their affidavits and documents. The District Forum allowed the complaint and directed the L.I.C. of India to pay the amount due to the complainant under the concerned policy along with interest @ 12% per annum from the date the claim was repudiated, i.e. 10.6.1996 till the date of payment. The Forum also allowed costs of Rs. 1,100/ - to the complainant. We have heard the learned Counsel for the appellant and the learned Counsel for the respondent and have carefully gone through the judgment of the District Forum. We have also carefully perused the evidence led by the parties before the District Forum. The learned Counsel for the appellant has urged before us that the District Forum did not take into consideration the evidence led by the appellant, i.e. the L.I.C. of India. He has also submitted that the District Forum did not properly appreciate the contention of the L.I.C. that there was concealment on the part of the deceased of Tuberculosis at the time when the first policy was renewed and at the time when the second policy was taken. The learned Counsel for the appellant has further pointed out that the L.I.C cannot be held to be bound by the fact that the deceased/insured was medically examined by none less but the authorized Medical Officer of the L.I.C. According to the contention of the learned Counselor the appellant, the material fact to be considered was whether there was substantial concealment on the part of the insured at the relevant time when the policy was either renewed or taken afresh. The learned Counsel for the respondent on the other hand submitted that there was, as a matter of fact, no concealment whatsoever of the disease of Tuberculosis on the part of the insured. The deceased/husband of the complainant and in this regard he has referred to the affidavit of the complainant, i.e. Smt. Kavita Vinayak, impleaded as respondent in this appeal wherein she has categorically deposed about her husband, Shri Rakesh Vinayak, the insured telling the authorised Medical Attendant of the L.I.C. about his suffering from the disease of Tuberculosis. She has also deposed that something was noted down by the authorised Medical Attendant of the L.I.C. in his papers but she is not sure if this fact was noted herein or not. Apart from it, the learned Counsel for the respondent/complainant contended that Shri Rakesh Vinayak, the insured according to the Death Certificate issued by the P.G.I., Chandigarh died due to ''Aspiration'' resulting in cardiac arrest. The learned Counsel for the respondent thus argued that the disease of Tuberculosis had no nexus whatsoever with the cause of death reported in the Death Certificate and as such the claim put forth by the wife of the deceased/ insured Shri Rakesh Vinayak could not have been turned down by the L.I.C. In the case of New India Assurance Company v. P.P. Khanna, reported in II (1997) CPJ 1 (NC)=1997 (2) CPR 21, the Honble National Consumer Disputes Redressal Commission held as under : ''The onus probandi, in cases of fraudulent suppression of material facts rests heavily on party alleging fraud, namely the insurer. The insurer cannot avoid consequences of insurance contract by simply showing inaccuracy or falsity of statement. Burden is cast on the insurer to show that the statement was on a material matter or facts have been suppressed which it was material for the policy holder to disclose. It is further to be proved that the statement was fraudulently made by the policy holder with the knowledge of the falsity of statement or that the suppression was of material facts which had not been disclosed. The Courts will not be satisfied with proof which falls short of showing that intentional misrepresentation was made with the knowledge of perpetrating fraud.'' (Emphasis supplied) In the case of Life Insurance Corporation of India v. Smt. G.M. Channabasemma, reported in AIR 1991 Supreme Court 392, the Honble Supreme Court held as under : ''It is well -settled that a contract of insurance is contract uberrimae fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. The burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the Corporation.''

UPON careful perusal of the evidence on record, we find that L.I.C. of India could not substantiate by leading cogent evidence to show that the insured, namely Shri Rakesh Vinayak intentionally made mis -representation regarding the non -disclosure of suffering from the disease of Tuberculosis with the knowledge of perpetrating fraud. In our considered view, the disease of Tuberculosis in the instant case had no role to play regarding the death of the insured. In other words, there is no reasonable nexus established between the disease of Tuberculosis and the cause of death as reported in the Death Certificate. In this view of the matter, the aforesaid judgments relied by the L.I.C. of India are clearly distinguishable. Resultantly, we find that the District Forum has rightly allowed the complaint and no interference is called for in this appeal. The appeal is dismissed. Appeal dismissed.