Life Insurance Corporation Of India vs Sudesh Kumari @ Sudesh Koundal

The facts giving rise to the finding of this Revision Petition have been noted in the order dated 12.09.2018 which, to the extent it is relevant, reads as under:

"Late Shri Amar Singh husband of the complainant obtained two insurance policies from the petitioner - one being policy No.151111009 for a sum assured of Rs.50,000/- with guaranteed bonus and other being policy No.154532942 for a sum assured of Rs.11,00,000/-. Shri Amar Singh having died on 11.1.2014, the claims under the above-referred policies were allegedly lodged by the complainant with the petitioner. The claim was repudiated vide letter dated 27.3.2015 which, to the extent it is relevant, reads as under:-

"With reference to your claim under the above policy on the life of your deceased husband we have to inform you that we have decided to repudiate all liability under the policy on account of the deceased having withheld material information regarding his health at the time of effecting the assurance with us. In this connection, we have to inform you that in the proposal for Assurance dated 27.1.2013 signed by the deceased and declaration signed by him, he answered the following questions as under:-

11[a] During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week? NO

11[b] Have you been admitted to any hospital or nursing home for General check-up treatment or operation? NO

11[c] Have you remained absent from place of work on grounds of health during the last 5 years? NO

11[d] Are you suffering from or have you ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidney, brain or Nervous system? NO

11[i] What has been you usual state of health? GOOD

We may, however, stated that all these answers were false as we have evidence and reason to believe that before Revival for the above policy LA had Left Chest Pain since 16.1.2012 and had availed medical leave w.e.f. 17.3.2011 to 19.3.2011, 16.1.2012 to 24.1.2012 and 17.2.2012 to 18.2.2012. He did not however disclose this fact in his personal statement instead he gave false answers therein as stated above and obtained insurance fraudulently.

It is therefore evident that he had made deliberate misstatement and withheld material information from us regarding his health at the time of getting the policy revived and hence in terms of the Declaration signed by him at the foot of the said Personal Statement, the revival of the Policy is hereby declared null and void and all moneys paid towards revival of the Policy and subsequent thereto belong to us."

Being aggrieved from the rejection of the claim, the complainant approached the concerned District Forum by way of a consumer complaint. The complaint was resisted by the petitioner primarily on the ground that the life assured had a premedical history which he did not disclose despite being asked specifically in the form of questions in the proposal form. It was further alleged that the life assured having intentionally withheld material information, the complainant was not entitled to any payment.

The District Forum having dismissed the complaint, the complainant/respondent approached the concerned State Commission by way of an appeal. Vide impugned order dated 21.4.2018, the State Commission allowed the appeal and directed the petitioner to pay a sum of Rs.11,00,000/- under the policy No.154532942 and Rs.50,000/- with guaranteed bonus against policy No.151111009, with interest @ 9% p.a. from the date of the complaint. The compensation quantified at Rs.10,000/- besides cost of litigation quantified at Rs.5,000/- was also awarded to the complainant. Being aggrieved from the order passed by the State Commission, the petitioner is before this Commission.

The claim lodged by the complainant/respondent was repudiated merely on the ground that the deceased had made deliberate misstatement and had withheld material information from the insurer with respect to his health at the time of issuance/renewal of the policy. It is alleged in the repudiation letter that before revival of the policy, the deceased had left chest pain since 16.1.2012 and had availed medical leave during the period mentioned in the repudiation letter. In the written version filed by the petitioner, it was alleged that the life assured had a premedical history, which he had not disclosed. However, it was not alleged that the life assured had died on account of the ailments from which he had suffered or was suffering before obtaining the insurance policies. The learned counsel for the petitioner has drawn my attention to a letter dated 15.7.2010 sent by the concerned Chief Manager of State Bank of India where the deceased was employed to the administrative office at Shimla stating therein that no treatment at Dehra was available for the lung disease from which Shri Amar Singh was suffering and therefore he had been advised treatment at Fortis hospital.

In the application seeking reimbursement for the medicines etc. produced by him, the deceased had disclosed to his employer that he was suffering from Thyroid and internal disease of lungs. In another application seeking reimbursement, the deceased disclosed that he had Thyroid and Nodules in his chest. In the prescription dated 20.1.2012 issued by the Fortis hospital, the ailments of the deceased were diagnosed as Hhypothyroidism and GAD (General Anxiety Disorder) / Panic attacks. The same was the history given in another prescription issued to him by Fortis hospital.

It would thus be seen that according to the petitioner, the deceased was suffering from Hhypothyroidism had General Anxiety Disorder and also had a history of Nodules in his lungs. However, this is not the case of the petitioner that the deceased had expired on account of Hhypothyroidism / GAD / Nodules in his lungs. This is also not the case of the petitioner either in the repudiation letter or in its written version that any of the above-referred ailments was a life threatening ailment. Therefore, no nexus between the ailments from which the deceased suffered/was suffering and the cause of his death was alleged by the petitioner.

I have recently come across the decision of the Hon'ble Supreme Court in Sulbha Prakash Motegaonkar & Ors. Vs. LIC of India [Civil Appeal No.8245 of 2015] decided on 5.10.2015. In that case, the husband of the complainant had, at the time of taking the policy, from LIC of India, concealed the fact that he was suffering from Lumbar Spondylitis with PID with Sciatica for which he was taking medical treatment and had also availed medical leave. He suffered myocardial infarction and succumbed to the said ailment. The claim lodged by the complainant, however, was repudiated on the ground that the deceased had not disclosed the ailment of Lumbar Spondylitis with PID with Sciatica at the time of submitting the proposal. Allowing the complaint, the Hon'ble Supreme Court interalia held as under:-

"It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction. The concealment of lumbar spondilitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondilitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified."

The learned counsel for the petitioner submits that decision rendered by a two Members Bench of the Hon'ble Supreme Court in Sulbha Prakash (supra) being contrary to the earlier decisions of the Hon'ble Supreme Court in Mithoolal Nayak Vs. LIC of India [AIR 1962 SC 814], Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. [IV (2009) CPJ 8 (SC)] and P.C. Chacko & Anr. Vs. Chairman, LIC of India & Ors. [III (2008) CPJ 78 (SC)] is not a binding precedent since the Bench which rendered decision in Sulbha Prakash (supra) ought to have referred the matter to a lager Bench as it was taking a view different from the view taken in Mithoolal Nayak (supra), Satwant Kaur Sandhu (supra) and P.C. Chacko (supra). In support of his contention, he has referred to the decision of the Hon'ble Supreme Court in National Insurance Co. Ltd. Vs. Pranay Sethi & Ors. [SLP (Civil) No. 25590 of 2014], decided on 31.10.2017.

In Mithoolal Nayak (supra), the life assured was suffering from anemia, oedema of the feet, diarrhea and panting on exertion. It had been reported by the doctor who examined him at the instance of the insurer that his right lung showed indications of an old attack of pneumonia or pleurisy, his general health was very much run down and he was a total physical wreck and his life was an uninsurable life. The primary cause of his death was malaria followed by severe diarrhea, whereas the secondary cause was anemia, chronic bronchitis and enlargement of liver. The Hon'ble Supreme Court refused to treat the aforesaid ailments as previous or casual ailments. In P.C. Chacko (supra), the insured had withheld information with respect to an operation Adenoma Thyroid, which was a major operation. The Hon'ble Supreme Court held that he had suppressed facts which were material to disclose. In Satwant Kaur Sandhu (supra), the deceased was a known case of chronic renal failure / diabetic nephropathy and was on regular hemodialysis at his place. He was a known diabetic for the last 16 years. It was held by the Hon'ble Supreme Court that the insured had withheld a material fact in regard to his health and therefore, the insurer was justified in repudiating the insurance contract.

In Revision Petition No.2858 of 2017 - Reliance Life Insurance Co. Vs. Krishan Kumar, decided by this Commission on 18.4.2018, the insured had withheld information that he was suffering from hypertension for 3 years. It was noted by this Commission that there was no co-relation between death of the insured and hypertension, he having died due to electrocution. Reliance on the above-referred decision of the Hon'ble Supreme Court was placed in taking the aforesaid view.

In Revision petition No. 864 of 2018 - LIC of India Vs. Jyotsana Rawal, decided on 8.5.2018, the insured had been treated with higher antibiotics had taken leave for several periods and had been referred to TB Hospital after his blood investigations with ECG, X-ray of chest. He, however, died due to heart attack. It was held that referral to TB Hospital was not sufficient to prove that the insured was suffering from TB. Reference was made to the decision of the Hon'ble Supreme Court in Sulbha Prakash (supra) and it was observed that there was no direct co-relation between tuberculosis or heart attack."

Since this Commission wanted to find out the cause of death of the assured, the notice of the Revision Petition was issued to the complainant for today. The notice is reported to have been served upon her on 17.10.2018 but no one is present for her. The learned counsel for the petitioner states that he has brought the Death Certificate of the assured but the cause of death is not given in the said Death Certificate. Since it is necessary to verify the cause of death of the assured and the said cause has not come on record, the matter needs to be remitted back to the concerned District Forum to record evidence to find out the cause of death of the assured and then decide the complaint afresh in the light of the decision of the Hon'ble Supreme Court in Sulbha Prakash (supra). The impugned order is accordingly set aside and the matter is accordingly remitted back to the State Commission for deciding the complaint afresh in terms of this order. The parties are directed to appear before the State Commission on 18.01.2019. One copy of this order be sent to the complainant/respondent for information.