Life Insurance Corporation of India vs URMILA SRIVASTAVA

THIS is an appeal against the order dated 1.10.91 in complaint case no. 29 of 91 before Patna District Forum by which the appellant had been directed to pay to the respondent that the insured amount of Rs. 75,000/- along with interest @ 18% per annum and also to pay compensation of Rs. 10,000/- to the respondents.

THE appeal was filed after the expiry of the limitation period as envisaged u/Sec. 15 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act). It was contended by the appellants that this appeal was not time-barred as it was filed within one month of the receipt of the order of the District Forum. He was heard in detail and his contention was rejected vide orders passed by this Commission on 18.2.92. Since, however, there was sufficient cause for not filing this appeal in time the appellant were permitted to file an application along with an affidavit as provided for under Rule 8(4) of the Bihar Consumer Rules. This was done and after hearing both the parties the Commission is satisfied that there was sufficient cause for the late filing of the appeal and hence this appeal was admitted for hearing vide orders passed on 10.3.92. We have heard the learned Advocates for the appellants and the respondents and perused the records of the District Forum. This appeal was fixed for orders on 26.8.92 but on 25.8.92 the learned Advocate for the L.I.C. requested to postpone the judgment to any other date as the LIC were considering as to whether or not ex-gratia payment could be made in the matter. This was therefore fixed for orders on 22.2.92. Nothing has since been heard in this regard from the L.I.C. On account of the very sad and untimely demise of Hon''ble Justice B.N. Singh, all judicial work were postponed to 24.9.92, after the sad news were received. Orders in this case are, therefore, passed today.

The facts of the case have been set out in detail in the orders of the learned District Forum. In brief, the Bihar State Road Transport Corporation insured its employees with the L.I.C. under the Group Savings Link Insurance Scheme. This insurance took effect from 1.3.89. As it happened one of the employee viz. Shri K.K. Srivastava whose name appeared at the top of the list of the employees insured under this scheme died on 9th May, 1988. The Bihar State Road Transport Corporation paid amounts under other heads due to the deceased employee and recommended to the LIC to pay the amount of Rs. 75,000/- which was the amount payable on death to Shri K.K. Srivastava who was category-II employee of the BSRTC. The LIC has not paid this amount to the respondent on the ground that Shri Srivastava was on sick leave with effect from February, 1989 till his death on 9.5.89. This was a material fact which was not revealed to the Insurance Company and, therefore, they were not bound to pay this sum of Rs. 75,000/- to the heirs of Shri K.K. Srivastava because it was covered by the dictum of Suppressio veri suggestion Falsi. In support of their contention the L.I.C. drew the attention of the District Forum as well as our attention to the leaflet which was issued by it under the Group Savings Link Insurance Scheme giving details about the various provisions of this scheme. It is mentioned in this leaflet that "an employee will be admitted to the scheme without any medical examination provided he is not absent on grounds of sickness on the commencement date". It was argued vehemently that since Shri Srivastava was on sick leave on the date the commencement of the Master Policy under Group Savings Link Insurance issued to the Bihar Suite Road Transport Corporation for its employees, this stood in the way of admitting the claim of Shri K.K. Srivastava and hence no amount was paid to his heirs under this scheme.

THE only point, therefore, to determine is whether Group Insurance was vitiated or not in the case of Late Shri Srivastava being on sick leave. THE learned District Forum have come to a conclusion that by accepting the premium for the months of March & April 1989 the LIC were now ''estopped'' from raising this matter of the sick leave of Shri Srivastava on the date of the commencement of the policy viz. 4.3.89. THE learned District Forum in support of their finding have cited the judgment of the Hon''ble High Court, Patna as reported 1990 PJLR 104 and 1979 PJLR-232. Apart from this, we have also gone into the question as to whether the fact of Shri Srivastava being on sick leave as such made the Group Insurance void so far as he is concerned. THE General Conditions attached to the Policy do not contain any such clause about an employee being on sick leave as a necessary condition for eligibility or otherwise. THEse conditions in Paragraph 2 clearly mention that the Policy will be subject to standard age proof. In Para-3 of General Conditions every member shall produce satisfactory evidence of his health in such form and in such manner as may be prescribed by the LIC on the commencement of his membership. THE only enunciation, therefore, regarding the health of any member covered in that scheme, is that he has to produce satisfactory evidence in the prescribed form when called upon to do so by the LIC. In the instant case no such declaration about satisfactory evidence of a member''s health was sought for from him much less under any prescribed form. THE learned lawyer for the BSRTC clearly submitted before us that nothing was asked by the LIC and nothing suppressed. THEy also asserted that evidence of satisfactory health of any member insured under GSIL was not called for by the LIC. THEse assertions were not controverted. Further a leaflet issued for advertising the scheme cannot over-rule the General Conditions of the Policy about the eligibility of any member under the GSIL. As we have mentioned above; paragraph 3 of the General Conditions only lays down about production of satisfactory evidence of health in prescribed form and it also provides that the Corporation may not grant life insurance benefit or restrict the benefit to a smaller amount if the evidence submitted to the Corporation is not satisfactory. We have already discussed above that no prescribed form was issued in connection with the health condition of Mr. Srivastava and, therefore, no such declaration was made either by him or by the BSRTC. As a matter of fact Shri Srivastava opted for this scheme in 1988 in response to a querry by the BSRTC as to whether he was prepared to be a member of GSIL Scheme. His health was then satisfactory and there was, therefore, no question of his having made any false statement. In this context there was, therefore, no suppression of any material fact by him. And, therefore, the dictum of ''suppressio veri suggestio falsi'' can not be said to apply. THE BSRTC took sometime to collect options from various employees and could submit the proposal to the LIC only on 20.3.89 which was duly accepted by the LIC on 23.3.89, that is within three days of the submission of the proposal. It was open to the LIC to have demanded evidence of satisfactory health condition of the employees covered under the list who had opted for this scheme. No such thing was done. It was also open to the LIC to test check some of the employees medically to satisfy itself about their health condition, which was also not done and the proposal was accepted within three days of its submission perhaps because the LIC at that point of time were more interested in the collection of the premium when the financial year was coming to a close. We also find from Part-I Schedule attached to the General Conditions that for eligibility they should be "Regular Employees who are aged not less than 18 years and not more than 58 years" and that all the present employees in the above category may be admitted to the benefits on the date of the commencement of the Policy. We would, therefore, feel that in view of General Conditions discussed in the preceding paragraph much importance can not repeat not be attached to the statements made in the leaflet issued in connection with Group Savings Linked Insurance Policy. If it was such an important matter as has been made out it would have been mentioned clearly in the General Conditions of the Policy that the employee to be eligible under the scheme must not be on sick leave on the date of the commencement of the Policy. This is not so and the General Conditions of the Policy would govern the Policy and not any leaflet issued to advertise a scheme.

WE are, therefore, of the view that the LIC did not take proper steps to satisfy itself about the health condition of an employee covered under the GSLI in the proposal submitted to the BSRTC and they gladly accepted the premium from Mr. Srivastava through the BSRTC for the months of March, 89 and April, 89. It was only on the death of Shri Srivastava that all this question about his eligibility on that date have been raised. Before accepting the proposal as we have said earlier, the LIC did not take any steps inspite of a battery of Doctors being at its disposal to find out and satisfy itself about the health condition of any employee covered under this scheme. As such the LIC can be said to have waived this condition of satisfactory health on the date of the commencement of the policy. Moreover, there is absolutely no evidence before us whatsoever as to what was the cause of death and that the sickness of Shri Srivastava on account of which he was on sick leave, ultimately led to his death and can be directly related to it. Considering all these facts we do not see any reason to interfere with the orders of the District Forum and the appeal is, therefore, dismissed. The appellant will pay a further sum of Rs. 1,000/- (one thousand) only as costs of this appeal. Appeal dismissed.