Life Insurance Corporation of India vs PREMILABEN JAYANTILAL PATEL

THIS appeal arises from order dated 19.1.2002 rendered by the learned Consumer Disputes Redressal Forum, Panchmahals in Complaint Application No. 259 of 2000 directing the opponent Life Insurance Corporation of India (LIC for short) to pay to the complainant Rs. 50,000/- being the policy amount, accrued bonus, interest and other benefits with interest @ 9% p.a., cost in the sum of Rs. 1,000/- and compensation on the head of mental agony and hardship in the sum of Rs. 2,000/-.

WE have heard the learned Advocates for the parties. Short question which this Commission is required to answer revolves around these facts : The proposal for the policy of insurance in question was dated 25.12.1996. One of the life assured under the Jeevan Sathi Policy in question died on 13.3.2000 i.e. after passage of more than three years. The opponent Insurance Company repudiated the claim by letter dated September 30, 2000 on the ground that the life assured made suppression of facts to the effect that he did not take any medical treatment for any illness requiring such treatment during the five years preceding the date of proposal form, that he did not take any leave on such ground for a period of more than a week during such period of five years and that he did not suffer from any of the ailments set out in Clause (D) of the questionnaire in the proposal form. At the outset it may be noted that none of the ailments stated in this Clause (D) appears to be the cause of the death. It may also be stated that none of the ailments appears to have existed prior to the date of taking of insurance in question. It is in this background that the submissions made on behalf of the opponent LIC be considered. It was first submitted before this Commission that the life assured suffered from bronchitis, gastritis and PUO (Paraxia of unknown origin). All these ailments appear to be common ailments even if they are required to be taken into consideration. The alleged leave for a period of 15 days is also stated to have been taken on one of these grounds. It is not in dispute that the opponent LIC adduced no evidence before the learned Forum in support of its repudiation letter. Hence, it was a case of no evidence before the learned Forum in respect of the alleged suppression of facts. It is settled law that when a life assured dies after passage of two years from the date of proposal for insurance, the burden of proof would be on the insurer (in this case LIC) to prove that the ailment attributed to the life assured in fact occurred to him/her during the period of five years prior to taking of insurance. It is then only that question whether such ailments were material or relevant or having nexus with the cause of death or not would arise. In the present case opponent LIC failed to establish both the facts with regard to the aforesaid alleged ailments and the fact with regard to life assured having obtained leave from his service. The learned Forum has relied on the decision of the Apex Court with regard to proof of the documents reliance on which was placed by the opponent LIC before the learned Forum. With regard to Section 45 of the Insurance Act, 1938, it is settled law that if the death of life assured occurs within a period of two years, the Forum or the Court will have first look to the documents and then it will be for the complainant to establish that the ailments stated in the document, did not occur or were not having nexus with the questionnaire appearing in the proposal form. When the death occurs beyond a period of two years the burden is obviously on the opponent LIC to establish existence of such ailments. This proposition has been settled by the Apex Court in the case of Life Insurance Corporation of India v. Asha Goel, reported in I (2001) SLT 89=AIR 2001 SC 549.

In the case between LIC of India & Ors. v. Smt. Raksha Goyal, referred to from Legal Digest April, 2002 on behalf of the LIC, facts were referable to the First Part of Section 45 of the Insurance Act, 1938 i.e. that the death of the assured was occurred within two years from the date of the policy. In the present case the facts are referable to the other part of the aforesaid provision of the Insurance Act. In that view of the matter, decision in LIC of India & Ors. v. Smt. Raksha Goyal (supra), will not be applicable whereas decision in the case of Life Insurance Corporation of India v. Asha Goel (supra), will directly apply.

THAT would take us to the award with regard to mental agony and harassment. This being a matter pertaining to contract of insurance, such an award is not permissible. In that view of the matter, following order is required to be passed. ORDER Impugned order dated 19.1.2002 rendered by the learned Consumer Disputes Redressal Forum, Panchmahals in Complaint Application No. 259 of 2000 is hereby modified as under : (1) The opponent LIC would pay to the complainant, policy amount along with all permissible benefits, bonus and interest @ 9% p.a. from the date of complaint till payment and cost of the complaint quantified at Rs. 1,000/- by the learned Forum. Rest of the impugned order is hereby set aside. This appeal is accordingly allowed, with no further order as to costs. (2) The opponent LIC is stated to have deposited Rs. 25,000/- in this Commission. Office to first verify the amount and pay the same to the original complainant by way of A/c. Payee cheque. (3) The opponent LIC shall pay the amount directed by this Commission as above after adjusting the amount of Rs. 25,000/- deposited in this Commission. The LIC is at liberty to make the payment directly to the complainant or deposit the same in this Commission, in either case, within six weeks from today. Appeal disposed of.