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Judgment
LIFE Insurance Corporation of India, the opposite party, challenges order of District Forum, Ludhiana dated June 2, 1998 in this appeal. The Corporation was directed to pay the insured amount of Rs. 2 lacs alongwith interest @ 18% p.a. from December 13,1996 till payment to the complainant Nirvair Singh.
NIRMALJIT Kaur, wife of Nirvair Singh secured life insurance policy from Life Insurance Corporation in the sum of Rs. 2 lacs on May 14, 1994. She died on October 30,1995. The cause of death was complications on account of pregnancy. Her husband Nirvair Singh lodged a claim for the insured amount with the Corporation which was repudiated in 1996 that he approached the District Forum. On behalf of the opposite party, the Corporation, it was asserted that the repudiation was bona fide made on the material collected. The insured had given wrong answers to the material questions put in the proposal form with regard to insurance policy of her husband. Ultimately, it was found that at the time of securing the policy in question, husband was not at all insured. Both the parties led their evidence on affidavits and documents on the basis of which the impugned order was passed. Mr. B.J. Singh, learned Counsel for the Corporation relying upon an extract from under writing manual as published by Life Insurance Corporation argue that the case of the insured fell under Category No. Ill and it was incumbent upon her to give true particulars of the policy of her husband which was material fact to be taken into consideration while issuing the policy as to whether the husband was in a position to pay the premium of the policy in question or not and furthermore that policy in the name of the wife could not be for the amount more than the amount insured under the policy of the husband. Thus, the question for consideration in the present appeal is as to whether repudiation of the claim by the Corporation is arbitrary or based on material collected or that the case would be covered by Category III or Category II of the manual referred to above.
It is not disputed that Category I of the extract from the manual Annexure A-9 produced in the appeal is not at all attracted to the case in land, hence the same is not reproduced. Category II and Category III relevant portions are reproduced hereunder in order to appreciate the argument : "Category II : Women with unearned income attracting income tax, and having sizeable personal properties and/or investments yielding income attracting income tax are treated as Category II females. Category III : Those women who are not covered by Category I or Category II above are treated as Category III females for the purpose of insurance. The amount of insurance that can be granted to this category of females is as under : xxx xxx xxx b. Married Women : Total insurance cover up to a maximum of Rs. 7 lakhs, but not exceeding husband''s insurance in force for full sum assured may be granted. The underwriter should however examine whether the income of her husband can support the total insurance on his own life as well as on his wife''s life and on the lives of his dependent children, and also have regard to other aspects such as social status of the family, moral hazard etc. before deciding the amount of insurance that can be granted on such a proposal."
THE contention of Mr. B.J. Singh, Advocate for the Corporation is that Category II as described above covered only one clause of females, i.e. women with unearned income attracting income tax. THE remaining portion of the clause referred to above is to be in addition as far as source of income of such a woman is concerned and hence the case of Nirmaljit Kaur, insured will not be covered under Category No. II as above and residuary clause of Category III would be attracted. THE proposal form as submitted by Nirmaljit Kaur is Annexure A-2 produced with the appeal, copy of which was also produced before the District Forum. Under question No. 4-A, Present Occupation, it was recorded Agriculture''. With respect to Nature of Duties, it was stated ''assisting husband in agriculture''. Educational qualifications under question No. 5, it was stated to be ''Middle'' and Income ''Rs. 50,000/-'', Source of Income being ''Agriculture''. She was not income tax assessee. Copy of the Jamabandi was produced before the District Forum indicating that Nirmaljit Kaur was owner of 1th share in agriculture which is measuring 101 acres - 17 canals. THE Jamabandi is for the year 1993-94. At this stage, it may also be observed that in the proposal form as referred to above, particulars of the policy of the husband were also given. THE policy having been taken from Delhi Unit II of the Corporation for a sum of Rs. 3 lacs but subsequently the complainant gave in writing to the Corporation that no such policy was taken by him from Delhi Unit but he had taken the policy subsequently on August 25, 1994 for a sum of Rs. 1 lac (Annexure A-8). THE interpretation being put on the clause relating to Category II as reproduced above by Counsel for the Corporation is not correct. If the clause is closely read, it would show that there is a coma placed after the clause women with unearned income attracting income tax. THE second category of women covered under this category would be such women having sizeable personal properties and the case of Nirmaljit Kaur would well be covered under this sub-clause of the category. As demonstrated above, she was recorded owner of agricultural land. Further clause of Category II "and/or investments yielding income attracting income tax" would be third sub-category which would be covered under this Category II. It may be that the later clause may also be applicable to women of 2nd sub-category as referred to above attracting the clause of Category II. Since the case of complainant is fully covered under Category II as referred to above giving wrong particulars or incorrect particulars of non-existing policy of her husband in the proposal form, thus, cannot be considered to be information given on a material fact that the Corporation could legitimately repudiate the claim. THE very ground on which repudiation of the claim has been made being incorrect, the repudiation is held to be arbitrary. The contention of Mr. B.J. Singh, Advocate, that the FORA is not to sit as an Appellate Authority over the decision of the Corporation on the question of repudiate of the claim and placing reliance on some judgments is of no consequence when approach of the Corporation in respect of interpretation of Category II as referred to above, was legally not correct. It is true that the FORA is not to sit as an Appellate Authority that would only mean that the FORA could not take up a different view on the evidence collected by the Corporation in repudiating the claim. The present is not a case of appreciation of evidence. Hence, it is not considered necessary to refer to different judgments on the subject in detail. They are merely noticed : (1) AIR 1962 Calcutta 625 (2) II (1994) CPJ 585 (NC) (3) 1997 (2) CPR 233
THE last judgment referred to above was on the subject that the agent filling the proposal form is to be treated as agent of the proposer. In case the statement on facts as referred in the proposal form had been held to be on material point, the point raised by Counsel for the Corporation would have been accepted but this is not the position. Likewise, the following judgments are merely noticed as in such cases, the statement furnished was wrong on material facts : (1) AIR 1938 Calcutta 641- (2) AIR 1972 Madras 196 (3) AIR 1966 Allahabad 474 Mr. B.J. Singh, learned Counsel for the Corporation has argued that the interest on the insured amount @ 18% p.a. was excessive. This question was considered in detail by this Commission in Life Insurance Corporation of India v. Smt. Bimla Rani Kapur, 1998 (1) CON.LT 289, and it was held that ratio of the decision of Supreme Court in United India Insurance Co. Ltd. v. M.K.J. Corporation Limited, III (1996) CPJ 8 (SC), providing maximum 12% against Nationalised Insurance Companies was not applicable to the case of Life Insurance Corporation. This contention is, therefore, repelled. In the present case, District Forum was legally justified in holding deficiency in rendering service on the part of Corporation in not settling the claim on the basis of arbitrary repudiation and we find no ground to differ therewith. The appeal is dismissed with costs of Rs. 1,000/-. Appeal dismissed with costs.