Life Insurance Corporation of India vs V. JEEVA

THIS Revision Petition is directed against the order dated December 20, 1993 of the State Commission, Tamil Nadu, in appeal upholding the order dated April 16, 1993 by the District Forum, Tirunelveli.

THE husband of the Complainant had taken out a life insurance policy for Rs. 50,000/-, besides his earlier two policies of Rs. 8,000/- and Rs. 7,000/-. THE claim of the policies of Rs. 8,000/- and Rs. 7,000/- was settled by the Life Insurance Corporation of India, but repudiated as to the third policy of Rs. 50,000/-. Ad mittedly, the husband of the Complainant executed a proposal form for the life insurance for the sum of Rs. 50,000/- and deposited a part payment of Rs. 1,076.80 ps. as premium on June 24,1988 and the balance of the premium payable i.e. Rs. 807.60 was deposited on October 25, 1988. But, before the policy could be issued, the husband of the Complainant died on November 1, 1986. The first point raised before the District Forum and the State Commission as well as before us is that there was no concluded contract of insurance as the amounts received from the deceased were kept in suspense account and the proposal remained pending. There is no merit in this submission. The District Forum analysed the evidence on record, particularly the admission of D.W. 1 in his examination-in-chief that the Complainant''s husband took a policy for Rs. 50,000/- and the proposal is Exhibit-B.1, that on 24.6.88 Rs. 1,076.80 ps. was paid towards premium, that on 25.10.88 the balance premium of Rs. 807.60 ps. was paid and that the receipts in respect of the same were Exhibits-B.2 and B.3. The District Forum also noticed the cross-examination of D.W.1, where he admitted that the money (Rs. 807.60) is entered as ''balance of premium''.

The reason given by D.W.1 for not issuing the policy is a mistake on the part of Madurai office of the L.I.C. in not sending the details of previous policies which are required for the new proposal under their office rules. An inference was drawn by the District Forum that the proposal submitted by the husband of the Complainant was accepted by the Opposite Party. The District Forum came to the conclusion that it was L.I.C.''s deficiency in service when they did not issue the policy till 1.11.88

THE State Commission upheld the conclusion of the District Forum and opined that the L.I.C. has not chosen to issue the policy immediately and it now wants to take advantage of the same to contend that there was no concluded contract. THE State Commission also relied on the fact that the only ground put forward in the letter of repudiation is that the Complainant''s husband suppressed material facts about his health and there is no whisper that the contract of insurance was not concluded. THEre is no illegality or irregularity when the two Forums came to the conclusion that there was a concluded contract of insurance and deficiency in service. The next submission of Shri Rajiv Nayar is that the State Commission and the District Forum have failed to appreciate that there was intentional and fraudulent suppression of material facts on the part of deceased as to the state of his health in the proposal form and, therefore, the contract of insurance (assuming it came into existence) was void ab initio and unenforceable. Reference is invited to Exhibit B-10 - communication from the Central Bank of India regarding leave taken by him on medical grounds to urge that the deceased was suffering from various diseases which he suppressed in the proposal form. Both the Forums below came to the finding that the deceased died on 1.11.85 of "MioCordial Infraction" and there is nothing to show that the Complainant''s husband had previously any symptom of heart ailment and that he was aware of the same. The ailments mentioned in Exhibit B-10 are held as only passing indisposition which do not affect the general health. There is no error in this approach and the conclusion.

BEFORE parting, we may notice an error in the order of the State Commission. The quantum of compensation is Rs. 53,000/- with interest at 12 per cent per annum from 1.11.88 and compensation of Rs. 1,000/- (and not Rs. 1,00,000/-) besides costs of Rs. 250/- as assessed by the District Forum and upheld the State Commission. The Revision Petition fails and is dismissed with costs assessed at Rs. 1,000/- Petition dismissed.