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Judgment
These revision petitions have been filed by the petitioner Life Insurance Corporation of India (LIC) against the order dated 22.3.2018 of the State Consumer Disputes Redressal Commission, West Bengal, (in short 'the State Commission') passed in FA No.759/2016 and FA No.760/2016.
RP No.2189 of 2018
The brief facts of this case are that the respondent/complainant is the husband of the deceased life assured (DLA). The proposal was filed on 28.02.2012 and the policy no.457228976, Jeevan Tarang started from 15.3.2012. The sum assured was Rs.5,00,000/-.
RP No.2190 of 2018
The brief facts of the case are that the complainant is the husband of the deceased life assured (DLA). In this case, the proposal was signed on 29.7.2013 and the policy No. 457650539, Jeevan Saral became effective from 30.7.2013. The sum assured was Rs.6.25 lacs.
Life assured died on 19.10.2014. The claims under the policies were filed by the complainant. However, the claims under the policy for Rs.6.25 lacs was repudiated on 21.1.2015 and the claim under the policy for Rs.5,00,000/- was repudiated on 26.2.2015 and the claims were repudiated on the ground that the DLA had not disclosed the material information in respect of her pre-existing diseases. In fact, one repudiation letter mentions the following:-
"In this connection, we have to inform you that in the proposal for Assurance dated 28.02.2012 signed by the deceased assured, she had answered the following Questions as under noted:
QUESTIONS:
Q.No.11 in Proposal:
ANSWERS:
During the last five years did you consult a Medical Practitioner for any ailments requiring treatment for more than a week?
NO
Have you ever been admitted to any hospital or nursing home for general check up, observation, treatment or operation?
NO
Have you remained absent from place of work on ground of health during the last five years?
NO
Are you suffering from or have you ever suffered from ailments pertaining to liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system?
NO
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 diseases?
NO
Did you ever have any bodily defect or deformity?
NO
Did you ever have any accident or injury?
NO
Do you use or have you ever used?
Alcoholic Drinks
(ii) Narcotics
(iii) Any other drugs
(iv) Tobacco in any form
NO
NO
NO
NO
NO
What has been your usual state of health?
GOOD
We may, however, state that all these answers were false as we have evidence and reason to believe that before she proposed for the above policy she was suffering from HTN, Hypothyroidism and Rheumatic Arthritis Disease. For this captioned health problem, she was under the treatment of Dr. Krishnendu Dey (Prescription dated 01.12.2010), Dr. K.Ghosh Hazra (prescription dtd. 05.08.2011) and Dr. Partha Pratim Pan (Prescriptions dated 13.09.2011, 12.10.2011 and so on). Hence it is clearly evident that the deceased Life Assured was not in sound health at the time of signing this proposal. She had not however, disclosed these facts in her proposal instead she gave false answers therein as stated above.
It is therefore, evident that she had made deliberate misstatement and withheld material information from us regarding her health at the time of effecting the assurance and hence in terms of the policy contract and the Declaration contained in the forms of proposal for Assurance, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof stand forfeited.
We enclose herewith our leaflet styled "why is a Life Insurance Claim repudiated" which is self-explanatory."
On similar grounds, the other policy was also repudiated. The complainant then filed a consumer complaint before the District Forum, Siliguri. On contest the District Forum allowed the consumer complaint by directing the opposite party to pay the insurance amount in both the policies along with compensation and cost of litigation.
The opposite party Corporation preferred separate appeals No.759/2016 & 760 of 2016 before the State Commission. The State Commission vide its order dated 22.3.2018 dismissed both the appeals by two separate orders.
Hence the present revision petitions.
Heard the learned counsel for the parties and perused the record. Learned counsel for the petitioner stated that the investigation was conducted in the matter and it was found that the DLA was suffering from HTN (for last 6-7 years), Hypothyroidism (for last 3 years) and rheumatic Arthritis (for last 17 years) and also concealed the fat that she had consulted several Medical practitioners, for example on 26.7.2010, 30.07.2010, 01.12.2010, 05.08.2011, 13.09.2011, 16.09.2011, 19.09.2011, 21.09.2011, 27.09.2011, 12.10.2011, 17.10.2011, 05.12.2011,07.03.2012 before filling the proposal form. The District Forum has observed that there was no proof that the insurance company or its agent explained all the 'items' of questionnaire in the proposal form to the DLA. Therefore, for answers given, the DLA cannot be held responsible. In this regard, the State Commission has also agreed with the finding of the District Forum. The District Forum has observed the following:-
"It is a very common practice in our country that always agents appointed or acted on behalf of the Insurance Company put signature of the proposer. .... It is admitted position that they took money through their duly authorized agent, but the same is not proved by acceptable evidence. Merely disputing the claim of complainant is not enough. The defence of repudiation taken by the OP Nos.1 & 2 must be proved by them by reliable cogent oral evidence or cogent documentary evidence. There is nothing in record to show that all the terms and conditions of the policy were explained to the policy holder and who after being satisfied and understanding the questions put signature on the proposal form."
It was argued that the State Commission has raised question mark on the proposal form having been signed by the proposer by observing the following:-
"That part, it is noteworthy that the proposal form was not filled up by the DLA. Being a literate person, the DLA was very much capable of filling up the proposal form herself. Question arises, despite this, why the proposal form was not filled up by the DLA concerned. Had the proposal form been filled up by her, at least she could have the opportunity of having a glimpse of the particulars of the proposal form."
Learned counsel further argued that the State Commission has not considered the arguments and papers filed in respect of the pre-existing diseases of the DLA on the ground that the DLA was examined by a panel doctor of the Insurance Company who has certified good health of the DLA. In this regard, learned counsel argued that the insurance is a contract of utmost good faith and a party is required to give all the information that the party has to the other party. The panel doctor cannot find out the internal diseases from which the DLA was suffering. It was the duty of the DLA to have disclosed all the diseases from which she was suffering.
Learned counsel for the petitioner stated that the State Commission has tried to exonerate the DLA from giving the complete information in the proposal form by observing the following:
"Also, it is an open secret that procuring insurance business is the be all and end all of insurance agents. Therefore, in order to achieve their business target, in most of the cases, agents of the Insurance Companies do not explain the grey areas of the insurance policies and obtain signature of prospective clients literally on the blank form and thereafter, fill up the same behind the back of the prospective clients as per their whims and fancies.
Since the proposal form was not filled up by the DLA, there always remains an element of suspicion as to the (1) filling up of the proposal form properly as per the direction of the DLA and (2) filling up of the same in presence of Respondent's wife, since deceased."
On the other hand, learned counsel for the respondent /complainant stated that the panel doctor of the opposite party had examined the DLA and accordingly good health certificate was given. Both the fora below have given concurrent finding and the scope under the revision petition is quite limited as the facts cannot be reassessed by this Commission. Both the fora below have found that there was no suppression of material information by the DLA.
I have carefully considered the arguments advanced by the learned counsel for the parties and have examined the material on record. First of all, it is seen that policy No. 457228976 was issued on 15.3.2012 and the insured died on 19.10.2014, thus, the death has occurred after two years from the date of the policy and hence, under Section 45 of the Insurance Act, 1938, the Insurance Company cannot repudiate the claim unless it is proved that some material information was suppressed fraudulently. The fact is that some of the pre-existing diseases mentioned by the Insurance Company are lifestyle diseases like hypertension, which are quite common. The information in respect of other diseases and the information in respect of treatment given by some doctors cannot be considered as material information withheld fraudulently. The Insurance Company has not been able to prove that this information was fraudulently concealed by the insured. Thus, I am inclined to give benefit of Section 45 of Insurance Act 1938 to the complainant and accordingly, I agree with the orders passed by the fora below and the claim under policy no. 457228976 stands allowed as per the order of the District Forum.
So far as another policy No. 457650539 is concerned which was issued on 29.7.2013, clearly the death has occurred within a period of two years and the benefit of Section 45 of the Insurance Act, 1938 cannot be given in this case. The District Forum order reveals that the complainant himself filed the following papers before the District Forum:-
"11. One copy of prescription issued by Dr. Krishnendu Dey on 01/12/2010 in the name of deceased Soma Karmakar.
One copy of prescription issued by Dr. Krishnendu Dey on 19/07/2011 in the name of Mr. S.Karmakar, male.
One copy of examination report of deceased some Karmakar.
One copy of prescription issued by Dr. Partha Pratima Pan on 07/03/2012 in the name of deceased Soma Karmakar.
One copy of prescription issued by Dr. Ghosh Hazra on 05/08/2011 in the name of deceased Soma Karmakar."
The repudiation letter also refers these prescriptions and which have already been admitted by the complainant. Thus, in a way, the complainant has admitted the diseases of the DLA. The Insurance is a matter of utmost good faith and therefore, the parties are required to disclose full information that they have to the other party. The Hon'ble Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., 2009 INDLAW SC 856, has observed the following:-
".........Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment."
As death has occurred within a period of two years and the benefit of Section 45 of the Insurance Act 1938 cannot be given to the complainant in this case, the Insurance Company has a right to repudiate the claim on the basis of information not provided by the DLA in the proposal form.
It is also seen that the District Forum has not actually examined the issue of pre-existing diseases as raised by the opposite party in the repudiation letter. The District Forum has mainly passed the order on the ground that no proof was given before the District Forum for explaining the different aspects of the policy to the DLA by the Insurance Company or its agent. The District Forum has, in fact, not examined the evidence given by the opposite party. However, the claim was allowed.
The State Commission has dismissed the appeal on the ground that Section 19 of the Indian Contract Act demands that due diligence should have been made by the Insurance Company i.e. the thing which can be found out, should have been found out by the Insurance Company. Thus, in a way, State Commission says that the existing diseases of the DLA should have been discovered by the Insurance Company. This is not a sound argument and the insurance being a matter of utmost trust, it was the duty of the DLA to have disclosed all the diseases that she was suffering from. The State Commission has also doubted that the proposal form has been signed by the DLA. If the proposal form has not been signed by the DLA, no insurance can be claimed by the nominee of the DLA in the policy because the proposal must have been signed by somebody else, then insurance policy becomes void ab initio. This observation of the State Commission cannot be sustained otherwise even the claim under the policy No. 457228976 where benefit of Section 45 of the Insurance Act is being given to the complainant cannot be held valid.
The Hon'ble Supreme Court in Reliance Life Insurance Co. Ltd. and anr. Vs. Rekhaben Nareshbhai Rathod, II (2019) CPJ 53 has clearly observed that even if the proposal form is filled by the agent and is signed by the proposer, it will be deemed to have been filled by the proposer. The Apex Court has observed the following
"31 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 Ltd 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. Further, apart from any question of imputed knowledge, the insured by signing that proposal adopts those answers and makes them his own and that would clearly be so, whether the insured signed the proposal without reading or understanding it, it being irrelevant to consider how the inaccuracy arose if he has contracted, as the plaintiff has done in this case that his written answers shall be accurate."
On the basis of the above discussion, I am of the view that the repudiation for the claim under the policy No.457650539 is valid as the Insurance Company is authorised to repudiate the claim on the basis of the information not filed by the proposer in the proposal form.
Based on the above observations, the RP No.2189 of 2018 filed in respect of policy no.457228976 is dismissed and RP No.2190 of 2018 is allowed and the order of the District Forum dated 19.07.2016 and the order of the State Commission dated 22.3.2018 in respect of policy no.457650539 are set aside.