Life Insurance Corporation of India vs NURBIBI VALIMOHMED MOMIN

THIS appeal arises from order dated 25th February, 1998 rendered by the learned Ahmedabad City Consumer Disputes Redressal Forum in Complaint No. 317/1997. Impugned order reads as under : "The opponent is directed to pay to the complainant, the sum of Rs. 1,00,000/- with interest at the rate of 18% per annum from the date of complaint till payment and to pay the cost of Rs. 10,000/-."

THE question that arises for consideration of this Commission in this appeal is whether the insured Valimohmad Noormohmad suppressed material fact or gave out incorrect fact when he had availed of revival of policy of insurance in question which was originally taken on 28th October, 1992 and revived on 10th April, 1995. Brief facts attending to the question noted hereinabove and submitted by Mr. H.J. Bhatt, learned Advocate appearing for the opponent Insurance Company are : The insured had complaints of breathlessness, chest pain, fever and cough as per the medical attendance certificate issued on 5th August, 1996 by the Medical Officer/G.K. Sheth, Municipal Dispensary, Dholka. The period from which he had that complaint is stated to be 2-3 years. The certificate of treatment given by Dr. C.V. Barad whose name appears in the aforesaid medical attendance certificate also indicates the same facts. The said doctor has also stated that the complaints of the deceased insured as aforesaid were diagnosed as a Cor - Pulmonalae in January, 1996, that is to say, after about 6 to 7 months of revival of the policy. It would, therefore, be clear that neither the ailment nor the disease from which the insured was stated to be suffering was diagnosed at any point of time prior to January, 1996. The deceased insured was, therefore, admittedly not knowing about what ailment or disease he was suffering from when the revival of policy was taken. Thus, this is a case of merely symptoms complaints regarding which were made by the insured and there was no diagnosis of such symptoms at any point of time before January, 1996. It is in this background that the decision of Hon''ble National Commission referred to on behalf of the opponent Insurance Company before us will merit consideration.

In LIC of India & Ors. v. Smt. Raksha Goyal, decided on 3rd October, 2001 in Revision Petition No. 947/1997 the insured was in fact suffering from heart ailment and in that case the provision under Section 45 of the Insurance Act appears to have been invoked in favour of the LIC of India. It would, therefore, be clear that the facts before the National Commission were entirely different from the facts in this case.

REFERENCE may also be made to a decision of the Hon''ble National Commission in the case of LIC of India & Anr. v. Parveen Dhingra, decided on 15th March, 2002 in Revision Petition No. 897/2001. In that case also the insured was stated to have suffered from liver disease before the revival of the policies. The question that was for consideration before the National Commission was that the statement made by the insured in the Form for revival of the policy indicating whether the insured suffered from the "illness/disease" requiring treatment for a week or more was correct. The insured in that case in fact was suffering from liver disease before the revival of the policies. In the present case the facts which are not in dispute and which have in fact been presented by the learned Advocate for the opponent LIC would go to indicate that the insured was having the aforesaid complaints but those complaints were not diagnosed prior to January, 1996, even in January, 1996. The Cor-Pulmonalary disease would broadly indicate a group of ailments. Which of the group of ailments the diseased insured suffered was not diagnosed. Thus, neither the insured was diagnosed to be suffering from any ailment/disease at the time of revival of the policy nor did he have any knowledge of such facts. In the background of such a factual situation of the present case the opponent LIC can hardly avail of the benefit of the provision under Section 45 of the Insurance Act. The decision of the Hon''ble National Commission referred to hereinabove hence will not apply to the facts of the present case. It has next been submitted that the opponent LIC did not produce affidavit of the doctor who gave aforesaid statement to the LIC. Hence it has been submitted that repudiation was not mala fide on the part of the opponent LIC. It has, therefore, been submitted that order of interest and the cost, which is exorbitant on the face of it, might be reconsidered in this appeal.

WE have heard Mr. A.V. Modi, learned Advocate appearing for the complainants (respondents herein). WE are of the opinion that there is some substance in the submission of Mr. H.J. Bhatt, learned Advocate for the appellant, with regard to award of interest @ 18% p.a. as also of cost in the sum of Rs. 10,000/-. WE propose to reduce rate of interest from 18% to 9% p.a. relying upon the decision of the Hon''ble Supreme Court in the case of Kaushnumma Begum v. New India Assurance Co. Ltd., reported in I (2001) SLT 300=I (2001) ACC 150 (SC)=2001 (1) Supreme Today P-5. Bearing in mind the facts and circumstances of the present case we propose to reduce award of cost from Rs. 10,000/- to Rs. 500/-. However, we propose to issue directions to the LIC of India to accord all available/permissible benefits of the policy of the life insurance to the complainants. Following order is, therefore, passed : Impugned order dated 25th February, 1998 rendered by the learned Ahmedabad City Consumer Disputes Redressal Forum in Complaint No. 317/1997 is hereby modified as under : Opponent LIC is directed to pay to the complainants Rs. 1,00,000/- with interest @ 9% p.a. from the date of the complaint till the date on which the amount has been deposited by the opponent LIC (appellant herein) in this Commission and cost of complaint quantified at Rs. 500/-. The opponent LIC will also give all permissible benefits which have already been accrued under the policy of life insurance in question to the complainants. This appeal is accordingly partly allowed with no further order as to cost. The opponent LIC is stated to have deposited Rs. 1,40,000/- in this Commission. The office will verify the amount and effect payment by A/c payee cheques upon a joint application being given by the parties as per the working of the amount pursuant of the aforesaid modified order. Appeal partly allowed.