Life Insurance Corporation of India vs Kuppammal

THE opposite party is the appellant. THE complainant is the respondent.

THE complainant''s case is that her son namely Srinivasan had taken insurance policy for Rs. 50,000/- on 20.3.1993. He had taken another policy for another sum of Rs. 50,000/- on 3.1.1997. THE premiums were regularly paid. THE complainant''s son Srinivasan, the insured, died. THE complainant preferred a claim. THE opposite party repudiated the claim with regard to the policy dated 3.1.1997 bearing No. 730717912. Hence, the complaint. The opposite party contended that the complainant''s son was an employee of Indian Bank and that it is true that he had taken two policies each for Rs. 50,000/- one on 20.3.1993 and another on 3.1.1997. With regard to the second policy, the complainant''s son had suppressed material facts. He was suffering from Tuberculosis for which he was under treatment and was on leave for more than 32 days. But in the proposal form, while answering question on the personal history, he had stated that he did not suffer from any illness requiring treatment for more than a week and that he was not admitted in any hospital or nursing home for general checkup, observation, treatment or operation and that he has not suffered from any ailment pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system and that he has stated that his health has been good. Since it was a non-medical policy, the proposal was not subjected to any medical examination by the panel of doctors. Though he was suffering from Pulmonary Tuberculosis even prior to the filling in the proposal form, he had suppressed this ailment. He had applied for leave for more than 32 days from 9.9.1996 to 10.10.1996 and thereafter periodically on the ground that he has been taking treatment and that he has been hospitalized. He also sought reimbursement of medical expenses therefor. As there has been suppression of material facts, the policy was rightly repudiated. With regard to the first policy of the year 1993 as the deceased was hale and hearty and at that time he was not affected with any disease and also there was no suppression, the same was honoured. Thus, there is no deficiency in service.

The lower Forum by its order dated 22.6.1999 issued a direction to the opposite party to pay the benefits of the policy with interest at 12% per annum along with a compensation of Rs. 10,000/- and a cost of Rs. 500/-. Hence, this appeal by the opposite party.

THE contract of insurance being one based upon good faith, if there is any suppression of material facts which would affect the very basis of the contract, then the contract would fail. Here in this case on hand, the case of the opposite party is that the complainant''s son was suffering from Tuberculosis which was concealed by him when he took out the policy and thus as there was material suppression concerning his health, the contract of insurance thus stands vitiated and, therefore, the opposite party is not bound to honour the same. THE proposal form has been marked in this case as Ex. B1. THE complainant has given a declaration stating that "...I do hereby agree and declare that these statements and this declaration shall be of the contract of assurance between me and the Life Insurance Corporation of India and that if any untrue averment be contained therein, the same shall be absolutely null and void and all monies which shall have been paid in respect thereof shall stand forfeited to the Corporation. In the relevant page which contains the questionnaire regarding his personal history, he has answered all the columns as "No" and also stating in the affirmative that his health has been good. Though these columns contain about 10 questions, we are concerned with the answers to the questions (a) to (e). (a) During the last five years did you consult a Medical Practioner for any ailment requiring treatment for more than a week? (b) Have you ever been admitted to any hospital or nursing home for general checkup, observation, treatment or operation? (c) Have you remained absent from place of work on grounds of health during the last 5 years? (d) Are you suffering from or have you ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system? and (e) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other disease? All these questions have been answered in the negative by the insured. Accepting these statements, the endowment assurance policy has been issued in favour of the insured Srinivasan for Rs. 50,000/- on 3.1.1997. It is admitted that Srinivasan was an employee of Indian Bank, Thiruvannamalai. THE opposite party has produced documents to show that the complainant was on medical leave and had also drawn monies from the Indian Bank for meeting the medical expenses. Ex. B4 is the certificate issued by the Indian Bank stating that the said Srinivasan was sanctioned 32 days PL on medical grounds from 9.9.1996 to 10.10.1996. Ex. B5 is the Xerox copy of the letter addressed by Srinivasan to the Zonal Manager, Indian Bank, Vellore. He has stated in the letter that he has been suffering from fever for some time and he had very high fever on 9.9.1996 and fell unconscious and that he was taken to the nearest hospital where he was treated and that it was diagnosed that he was suffering from Tuberculosis. He has further stated that since there was no approved hospital in Tinivannamalai and his hospitalization was an emergent one, he requested to sanction the eligible amount towards the hospitalization bill. Exs. B7, B8 and B9 are Xerox copies of the proceedings of the Indian Bank. Ex. B7 is to the effect that a sum of Rs. 6,714.90 has been sanctioned as hospitalization expenses to Srinivasan for the treatment of Tuberculosis disease. It further says that the date of admission was on 9.9.1996 and he was discharged on 10.1.1996. THE detail of treatment is shown as "Lymph Node Biopsy of the neck". Ex. B8 is the Xerox copy of PL application submitted by the deceased for leave from 9.9.1996 to 10.10.1996 on medical grounds. Ex. B9 is another proceeding relating to sanction of Rs. 4,644.90 towards medical reimbursement. THE contention of the complainant is that these documents are Xerox copies and cannot be admitted in evidence. THEy are, no doubt, Xerox copies of the letters/proceedings of the Bank in favour of the insured wherein the insured was an employee. THE original copies of the same are available only with the Bank as records. Either because they were not available or they could not be summoned, the Xerox copies have been produced. THE letter stating that the complainant''s son was granted medical leave and was on leave from 9.9.1996 to 10.10.1996 is the original letter issued by the Bank. It is not the case nor it can be the case of the opposite party that these documents were concocted. THE decision relied by the complainant reported in 1999 II MLJ page 1, in the case between J. Punithavalli v. THE Life Insurance Corporation of India, Madras cannot apply to the facts of this case. It was a suit where a certificate detailing disease suffered by the insured long after insurance policy was taken and long after it was issued after the death of the deceased was sought to be marked through some person because the doctor who issued the certificate was dead. THErefore, it was held that it was not admissible in evidence. But what is now produced in this case is not the doctor''s certificate but a communication from the bank where the complainant''s son was an employee. It is also not in dispute that the complainant''s son died while in service. It cannot be also averred that the documents had been concocted. THErefore, these documents would show that on the date of the proposal, the complainant''s son was suffering from Pulmonary Tuberculosis for which he had treatment but suppressing the same, he has chosen to declare himself to be free from any illness and taken the policy. THE opposite party also produced documents to show that the complainant''s son was admitted in Deepam Hospital, Thiruvannamalai from 9.9.1996 to 10.10.1996. THEy have produced the Xerox copies of the relevant documents. THEy have produced medical certificate for leave issued by the Rajam Clinic, Thiruvannamalai to the effect that Srinivasan, sub-staff, Indian Bank, Tiruvannamalai has been suffering from Pulmonary Tuberculosis and, therefore, his absence from duty for a period of 14 days from 15.4.1997 to 28.4.1997, 2.5.1997 to 9.6.1997, 16.6.1997 to 5.7.1997 and 6.7.1997 to 19.9.1997 is necessary for restoration of his health. Therefore, sufficient materials have been produced by the opposite party namely the appellant herein to establish that there has been suppression of material facts by the insured. The burden of proof is, of course, on the insurer to prove fraud as held by the Supreme Court of India, I (1991) ACC 411 (SC). In the face of the above documents produced by the opposite party, the insurer, it has to be held that the burden of proof has been satisfactorily discharged. Therefore, it is clear that there have been suppression of vital information, a fraudulent representation and concealment of a material factor regarding the health condition of the insured and that the insured had suppressed material facts of his illness namely Pulmonary Tuberculosis of which he was suffering from on the date of the proposal and, therefore, the policy is rendered void ab initio. Hence, in such circumstances, we are of the view that the complaint cannot succeed and as a result, the order passed by the lower Forum has to be set aside. We accordingly do so.

IN the result, this appeal is allowed with cost of Rs. 250/-. The order of the lower Forum is hereby set aside. The complaint will stand dismissed with cost of Rs. 250/-. Appeal allowed.