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Judgment
Avm J. Rajendra, Avsm, Vsm (Retd.), Member
The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 14.05.2019 passed by the learned State Consumer Disputes Redressal Commission, UP, Lucknow (“the State Commission”), in Consumer Complaint No. 299 of 2017 whereby the State Commission partly allowed the Complaint.
There is a delay of 85 days in filing of the present First Appeal. For the reason stated in IA/15075/2019, the delay is condoned.
For the sake of Convenience, the parties in the present matter being referred to as mentioned in the Complaint before the State Commission. “Rama Mishra” is identified as the Complainant/ Respondent who is a wife and nominee of the Life Assured Sushil Kumar Mishra (Since Deceased). "Life Insurance Corporation of India" (LIC) is referred to as the Appellant/Opposite Party/Insurer.
Brief facts of the case, as per the Complainant, are that Complainant’s husband Shri. Sushil Kumar Mishra (“Deceased Life Assured” or “DLA”) obtained a Life Insurance Policy (Jeevan Anand Policy No. 288612057), under Plan-147/Term-16, for sum assured Rs.18,00,000/- from 28.07.2012 to 28.07.2027 from the OP. The first yearly premium Rs.1,42,587/- was paid at the time of proposal No. 8177 on 29.07.2012. Unfortunately, during the policy period the DLA died due to 'Cardiorespiratory Failure' on 24.06.2013. Following his demise, the Complainant filed a claim with the OP on 18.11.2014. However, the claim was repudiated by the OP/Insurer on 22.03.2017, citing incorrect and fabricated facts such as insured had obtained policy form the LIC fraudulently by suppressing and concealing true information about his health.
Being aggrieved by to the repudiation of claim and deficiency in service on the part of the OP, she filed Consumer Complaint No. 299 of 2017 before the State Commission seeking the insured amount of Rs.18,00,000/- along with interest @18% per annum, calculated from the date of her husband's demise, i.e., 24.06.2023, till the amount is fully realized. She also claimed compensation of Rs.5,00,000/- towards physical, mental, and economic distress, and Rs.1,00,000/- towards cost of litigation, along with interest at @24%.
In their reply, the OP contended that the DLA, Shri SK Mishra was treated as outdoor patient at SGPGI, Lucknow from 04.08.2010 to 08.11.2010 vide Registration No. 2010421191. During this period, he was diagnosed with Acute Hepatitis B, Reactivation of chronic Hep. B, and Acute Viral Hepatitis in Chronic Hep B disease. The OP contended that the deceased failed to disclose this medical condition while filling the proposal form for insurance policy on 29.07.2012. He concealed this information and obtained the policy by providing false details. Further, Sri SK Mishra died on 24.06.2013 due to Jaundice, Ascites, and Hepatitis, which the OPs contended was related to his earlier undisclosed illness. Therefore, the OPs repudiated the complainant's claim based on these grounds, asserting that they had not committed any deficiency in service.
The learned State Commission allowed the complaint and ordered the following: -
“From the above explanation, it is clear that the copy of the record of P.G.I., Lucknow which has been produced by the opposite party to prove the prior illness of the husband of the complainant is not an Attested or certified copy of the alleged record of the P.G.I., Lucknow. Therefore it cannot be read In evidence. Therefore the opposite party cannot be given benefit of the afore-said authority referred by the Ld. Advocate for the opposite party.
The opposite party has not produced any other evidence or record of the prior illness of the husband of the complainant. Therefore, it is clear from the available evidences that opposite party could not prove the prior illness of the husband of the complainant. Therefore, the basis to repudiate the insurance claim of the complainant is not proved. Therefore the opposite party has committed a deficiency of service to repudiate the insurance claim of the complainant.
The opposite party can also not be given the benefit of the other authorities which have been referred to by the Ld. Counsel for the opposite party in the written submissions, on the basis of the facts and evidence of the present case.
The opposite party has repudiated the insurance claim of the complainant merely on the ground of concealment of true information regarding his health by her deceased husband. The opposite party cannot take a different ground that the one taken in the Repudiation letter to repudiate the insurance claim. Therefore the Delayed intimation alleged by the Ld. Counsel for the opposite party in the Written submission cannot be a ground to repudiate the claim.
On the basis of above analysis and conclusion, it will be appropriate to grant the sum assured with interest of 6 percent per annum from the date of filing of the complaint to the date of payment to the complainant.
There is no proper basis for granting the other relief sought.
On the basis of above discussion, the complaint is partly allowed and the opposite party is directed that it shall pay to the complainant the assured sum of her husband's insurance policy in question alongwith interest at the rate of 6 percent per annum from the date of filing of the complaint to the date of payment.
The opposite party will also pay Rs. 10,000/- (Rupees Ten Thousand only) to the complainant as litigation expenses.”
(Extracted from True Translation Copy)
Being aggrieved by the impugned order of the State Commission, the OP (Appellant herein) has filed this present Appeal no. 1870 of 2019 with the following prayer:
(a) Summon the records of Complaint No. 299 of 2017 of the Hon'ble State Consumer Disputes Redressal Commission, Uttar Pradesh at Lucknow; and/or
(b) Set aside the order dated 14.05.2019 passed in Complaint No. 299 of 2017 of the Hon'ble State Consumer Disputes Redressal Commission, Uttar Pradesh at Lucknow; and/or
(c) Pass any other or further order/s as may be deemed just and expedient.
The Appellant /OP has raised following key issues in the present memo of Appeal:
(a) The State Commission erred in not accepting registration certificate and OPD slip as evidence, even though these documents were obtained from the computerized record of SGPGI Hospital, and their authenticity was not challenged by the Respondent. There was no need for these documents to be attested by SGPGI officials.
(b) The State Commission should have given the OP an opportunity to file an additional affidavit bringing out the source of these documents or allowed attestation of the documents by a competent SGPGI official, especially since the existence of these documents was not contested by the Respondent.
(c) The State Commission failed to consider delay in submitting the death intimation/claim, filed almost one and a half years after the death of the DLA which hindered proper investigation and gave the Respondent an unfair advantage. The repudiation is justified.
(d) The State Commission overlooked the fact that the policy in question had become void due to condition No. 5 of the policy. Therefore, the Appellant should not be required to pay the substantial amount of Rs. 18,00,000/- to the Respondent.
Upon notice on the memo of Appeal, the Respondent has not filed any reply. However, she submitted written submissions.
In his arguments, the learned Counsel for the Appellant/OP reiterated the reply and the grounds of appeal and emphasized that the State Commission overlooked crucial aspects in the case. He argued that the State Commission failed to note that, at the time of taking the policy, the DLA had concealed vital health information from the insurer. He pointed out that the State Commission did not accept the OPD slip as it was a copy and lacked the doctor's signature. Citing the Supreme Court judgment titled Shafhi Mohammad v. State of Himachal Pradesh (SLP (CRL) 2302/2017, decided on 30.1.2018) that the legal position about admissibility of electronic evidence especially by a party who is not in possession of devise from which document is produced, such party cannot be required to produce certificate under section 65B of evidence Act. Further, the Appellant filed an application to introduce additional evidence viz. the duly stamped pathology report from Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow dated 4th, 5th, and 6th August 2019. This report indicated that the DLA was suffering from Acute Hepatitis B, Reactivation of Chronic Hep B, and Acute Viral Hepatitis in Chronic Hep B. This confirmed that the DLA provided false answers in the proposal. Thus, claim repudiation is justified. In support of the arguments, the learned Counsel cited the following judgments:
On Suppression of Material Facts:
a) Satwant Kaur Sandhu v. New India Insurance (2009) 8 SCC 316
b) LIC v. Manish Gupta, AIR 2019 SC 2606
On No Nexus Between Suppression and Cause of Death & Suppression of Material Facts:
a) Bajaj Allianz v. Dalbir Kaur, AIR 2020 SC 5210
On No Nexus Between Suppression and Cause of Death & Examination by Doctor Prior to Taking Policy by LIC Would Not Absolve the Policy Holder from Duty to Disclose:
a) LIC v. Kusum Patro
On No Nexus Between Suppression and Cause of Death Even Suppression and Cause of Death Even Suppression of Previous Policy Amount to Suppression:
a) Reliance Life Insurance Company Limited & Anr. v. Rekhaben Nareshbhai Rathod, reported in (2019) 6 SCC 175.
The learned Counsel for the Respondent reiterated the facts of the case in the Complaint and asserted that the State Commission's order granting just compensation was fair and well-reasoned. The Appeal lacks new grounds and is an attempt to harass her. The Appeal is not sustainable in the eyes of the law. Regarding the non-acceptance of the registration slip dated 04.08.2010, the learned Counsel asserted that the computer-generated slip, obtained by the investigator from SPGI, Lucknow should not be considered as evidence against the insured. The State Commission's decision not to accept it as evidence without an affidavit from the issuing authority was just and appropriate. The learned counsel contended that they had proven that the insured was thoroughly examined by the Appellant's doctor before the policy was issued, and OK certificate was issued regarding the DLA’s health. Despite this, the claim was repudiated after more than three years, citing fraudulent suppression of facts about the insured's health. The learned Counsel argued that this allegation was incorrect and was made to unjustly deprive her of the insurance amount. He asserted that the Appellant had not taken the plea that the ailment in question was life-threatening, which, according to a Supreme Court ruling Civil Appeal No. 8245 of 2015 - Sulbha Prakash Motegaonkar and others vs LIC of India, cannot be the sole ground for repudiation of a death claim. The counsel asserted that the Appellant's actions amounted to deficiency in service. He further argued that the Appellant's application under Rule 27 of Order 41 of CPC 1908, filed during the Appeal, was not applicable under the Consumer Protection Act. The Counsel pointed out several discrepancies and lack of necessary details in the application, rendering the obtained pathological report questionable and inadmissible as evidence. He emphasized that the non-payment of the genuine death claim amounted to a deficiency in service on the part of the appellant. In light of these arguments, the counsel asserted that the respondent's complaint deserved to be allowed, and the appeal of the appellant should be dismissed with costs.
We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.
The primary issue in this case revolves around the non-payment of the death claim by the appellant insurance company. The key questions to be resolved include whether the deceased, Shri SK Mishra had suppressed or concealed any material facts about his health while obtaining the insurance policy? And whether the medical report submitted by the Appellants during the Appeal is admissible as evidence? After consideration of these, whether the order of the learned State Commission requires any interference?
It is uncontested position that the Complainant’s husband Shri SK Mishra (DLA) obtained a Life Insurance Policy No. 288612057 for sum assured Rs.18,00,000/- from 28.07.2012 to 28.07.2027 from the OP. Unfortunately, during the policy period the DLA died on 24.06.2013. Following his demise, the Complainant filed a claim with the OP on 18.11.2014. However, the claim was repudiated by the OP/Insurer on 22.03.2017, citing concealment of health information by the DLA, in violation of Section 45 of the Insurance Act, 1938, as the policy had not surpassed two-year period from commencement of risk on 31.07.2012 to the date of death on 24.06.2013.
In this regard, the insured while entering the details of his personal history in Para (11) of the Proposal Form signed by him answered as follows:
S. No.
Questions
Answer
11 (II)
Have you ever been admitted to any hospital or nursing home for general checkup, observation, treatment or operation?
No
11 (Iv)
Are you suffering from or have you ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system.
No
11 (v)
Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy of any other diseases?
No
11 (ix)
What has been your usual state of health?
Good
The OP/Insurer contended that all the aforesaid responses were false. The documents received from SGPGI, Lucknow indicated that the insured was diagnosed with ACUTE HEPATITIS B - REACTIVATION OF CHRONIC HEP B - ACUTE VIRAL HEPATITIS IN CHRONIC HEP B, noted in CR No. 201042119 on 04.08.2010. This vital information was deliberately concealed by the DLA in the health status, during procurement of insurance policy. Thus, in terms of the insurance contract and the declaration made in the proposal form, the OP/Insurer rejected all claim under the policy.
As regards admissibility of the said report, the learned State Commission in its Order considered that the copy of the record of PGI, Lucknow produced by the OP to prove the prior illness of the DLA is not an Attested or certified copy of the alleged record of the PGI, Lucknow. Therefore, it cannot be read in evidence and the OP cannot be given benefit of the same. However, upon filing of the present Appeal, the Appellant/OP filed IA No. 15092 of 2019 under Order 41 Rule 247 of CPC to bring on record additional evidence as registration slips and provisional diagnosis by way of Affidavit. It was asserted that deep investigation was initiated post the impugned judgment and computer-generated pathology reports dated 4th, 5th & 6th August 2010 from SGPGI Hospital pertaining to the DLA were accessed. These documents assert that the DLA availed treatment at SGPGI Hospital and was provisionally diagnosed with Acute Hepatitis B, Reactivation of Chronic Hep. B, Acute Viral Hepatitis in Chronic Hep B. This critical information was concealed in the proposal form.
In H.S. Goutham vs. Rama Murthy [CA No. 1844 of 2010], dated 12.02.2021, the Hon’ble Supreme Court established a precedent that an appellate court cannot allow the introduction of additional evidence unless and until the prescribed procedure under Order XLI Rules 27-29 of CPC is duly followed. The relevant portion of aforementioned rules and judgment are as follows: -
“[Rule 27 Order XLI of Code of Civil Procedure 1908 "Production of additional evidence in Appellate Court" provides that (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if- (a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise if due diligence, be produced by him at the time when the decree appealed against was or (b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial case, the Appellate Court may allow such evidence or document to be produced, or witness to be examined. (2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission.
Rule 28 Order XLI of Code of Civil Procedure 1908 deals with "Mode of taking additional evidence": Wherever additional evidence is allowed to be produced, the Appellate Court may either take such evidence, or direct the Court from whose decree the appeal is preferred, or any other subordinate Court, to take such evidence and to send it when taken to the Appellate Court.
Rule 29 Order XLI of Code of Civil Procedure 1908 is about "Points to be defined and recorded": Where additional evidence is directed or allowed to be taken, the Appellate Court shall specify the points to which the evidence is to be confined and record on its proceedings the points so specified].
10.1 Even otherwise, it is required to be noted that as per the provisions of Order XLI, the appellate court may permit additional evidence to be produced whether oral or documentary, if the conditions mentioned in Order XLI Rule 27 are satisfied after the additional evidence is permitted to be produced in exercise of powers under Order XLI Rule 27. Thereafter, the procedure under Order XLI Rules 28 and 29 is required to be followed. Therefore, unless and until the procedure under Order XLI Rules 27, 28 and 29 are followed, the parties to the appeal cannot be permitted to lead additional evidence and/or the appellate court is not justified to direct the court from whose decree the appeal is preferred or any other subordinate court, to take such evidence and to send it when taken to the Appellate Court. From the material produced on record, it appears that the said procedure has not been followed by the High Court while calling for the report from the learned Principal City Civil Judge.”
Therefore, the additional evidence submitted through IA No. 15092 of 2019 under Order 41 Rule 27 of CPC has been admitted, as the learned State Commission had initially rejected this evidence on technical grounds. As a result, the contention of the Respondent challenging the validity of the computer-generated registration slip dated 04.08.2010, obtained from SPGI Lucknow, as evidence stands addressed.
It is evident that the DLA was treated as an outpatient at SGPGI, Lucknow from 04.08.2010 to 08.11.2010, under Registration No. 2010421191 and he was diagnosed as Acute Hepatitis B, Reactivation of Chronic Hep. B, and Acute Viral Hepatitis in Chronic Hep B. It is also an established position that the Death Certificate issued by ‘Hospital Harsh’ dated 24.06.2013 reveals that deceased was admitted on 23.06.2013 with diagnoses of hepatitis, ascites, (illeg.) sensorium? hepatic encephalopathy, and cited the cause of death as cardiorespiratory failure at 9:00 PM on 24.06.2013. Therefore, there is no doubt about the fact that the DLA died due to the said medical conditions, which he was aware at the stage of submitting the proposal for insurance 29.07.2012 as he underwent treatment as an outpatient at SGPGI, Lucknow from 04.08.2010 to 08.11.2010 and was diagnosed as Acute Hepatitis B, Reactivation of Chronic Hep. B, and Acute Viral Hepatitis in Chronic Hep B. Thus, the failure of the DLA in disclosing his medical condition in the proposal form is clear. The Hon’ble Supreme Court in Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848 decided on 09.10.2020 wherein it was observed as under:
“A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk.”
Similar view was taken in Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 decided on 24.11.2019 wherein it was held that suppression of facts in the proposal form will render the Insurance Policy voidable by the Insurer. A Division Bench of Mysore High Court in VK Srinivasa Setty Vs M/s Premier Life and General Insurance Co Ltd which is cited with approval by the Hon’ble Supreme Court in this case:
Finally, the argument of the respondent that the signatures of the assured on the form were taken without explaining the details cannot be accepted. A similar argument was correctly rejected in a decision of a Division Bench of the Mysore High Court in VK Srinivasa Setty v Messers Premier Life and General Insurance Co Ltd21 where it was held:
- Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understanding it. That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form.
- If an agent nevertheless does that, he becomes merely the amanuensis of the insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer.
In view of the aforesaid discussion, as well as the principles laid down by the Hon’ble Supreme Court brought out above, we are of the considered view that the order dated 14.05.2019 passed by the learned State Consumer Disputes Redressal Commission, UP in CC No.299/2017 is unsustainable in law and, therefore, set aside.
The First Appeal No. 1870 of 2019 is allowed.
There shall be no order as to costs. All pending Applications, if any, stand disposed of accordingly.
The Registry is directed to release the Statutory Deposit amount, if any due, in favour of the Appellants as per law.