LIFE INSURANCE CORPORATION OF INDIA THROUGH SR. DIVISIONAL MANAGER vs SURJAN SINGH SAINI

LIFE Insurance Corporation of India is in appeal and the challenge is to the order of the District Forum, Jalandhar dated October 27, 1997 whereby the Corporation was directed to pay the insured amount of Rs. 1 lac with 18% interest thereon w.e.f. September 1, 1995 till payment alongwith costs of Rs. 1,000/- to the complainant Surjan Singh Saini.

GURDEV Kaur w/o Surjan Singh had taken life insurance policy from the Corporation for a sum of Rs. 1 lac on November 28, 1994 on submission of proposal form dated November 24, 1994. She died on March 29, 1995. Claim was lodged with the Corporation for the insured amount which was repudiated by the Corporation on July 30, 1996. This led the complainant Surjan Singh to approach the District Forum for the relief. The Corporation took up the plea that the material facts relating to the health of GURDEV Kaur were concealed while submitting the proposal for taking the insurance policy and on cogent material collected, bona fide decision was taken in that respect repudiating the claim. 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 has argued that this is a peculiar case where death occurred within a short period of taking the insurance policy i.e., about 4 months. This required detailed investigation into the claim and after getting reference from the hospitals from where treatment of Gurdev Kaur was taken, it transpired that she was suffering from chronic diseases for the three months prior to the death. Thus, it was a case where knowing ill-health, intentionally policy was taken to defraud the Corporation of the insured about. The proposal form is Annexure O-9. Relevant questions to which the insured has given answer in the negative were question Nos. 11(c) and (d), whereas question No. (i) was answered in the affirmative. These questions and answers are also reproduced in the repudiation letter : "Questions Answer 11.(c) Have you remained absent from place of work on grounds of health during the last 5 years ? No. "Questions Answer (d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System ? No. (c) What has been your usual state of health ? Good." 3. The Counsel further relied upon the hospital reference Annexure O-4, Form No. 3784. Primary cause of death has been given as Myocardid Infaichis, Cardiogric Shock, Column No. 7 refers to the illness which preceded death which is given as Maxoedema Cholethiasis.

In Column No. 10, the duration of the illness was from 4.1.1995. Ex. O-5 is Form No. 3816 as issued by Ruby Nelson Memorial Hospital, Jalandhar City. Date of admission of Gurdev Kaur is stated as March 29, 1995. The previous treatment is w.e.f. 4.1.1995 by the same doctor at the time of admission, the condition reported is pain in abdomen off and on, Dispepsia - 3 weeks Increase Weight. Under the column history also, the illness aforesaid is stated to be three months old. Ex. O-5 is another Form No. 3816 giving similar history. This is also by Ruby Memorial Hospital.

ON the basis of the aforesaid documents, it has been argued by Mr. B.J. Singh, Advocate that at the time of taking the policy, Gurdev Kaur knew the nature of the disease with which she was suffering and this material information was concealed while obtaining the policy. ON the other hand, learned Counsel for the complainant has argued that before taking the policy Gurdev Kaur was medically examined by a doctor of L.I.C. and after he gave the clean chit, insurance policy was obtained. No doubt, medical examination conducted by doctor of the Corporation cannot be a bar for the Corporation to investigate the claims more particularly when the death occurred within a short span of time. National Commission has so held in various cases as cited by Counsel for the appellant. We may refer to only one of them, Life Insurance Corporation of India Ltd. & Anr. v. Kantaben, I (1996) CPJ 115 (NC). Learned Counsel for the Corporation has further argued that even if one question is answered wrongly that would justify the Corporation to repudiate the claim. It was open to the Corporation to take a decision that the nature of illness with which the insured was suffering after the same was brought to the notice of the Corporation. Learned Counsel has referred to the following citations : (1) Allianz Und Stuttgarter Life Insurance Bank Ltd. v. Hemanta Kumar Das, AIR 1938 Calcutta 641. (2) Balram Dutt Sharma v. Life Insurance Corporation of India, AIR 1966 Allahabad 474. (3) S. Subramaniam v. Hindustan General Insurance Society Ltd., AIR 1972 Madras 196.

SO far as position of law is concerned, there is not much dispute. The question for consideration is as to whether the concealment is of material fact or not in the present case. From the documents referred to above, it can only be gathered that at the time of the death or atleast at the time when Gurdev Kaur got admission in the hospital, she was suffering from the diseases mentioned in the certificate and before that it was only the complaint of pain in the abdomen. It cannot be said that if pain was felt in the abdomen during the period of submitting the proposal it must be co-related to the Gall Bladder or the Kidney. No evidence has been produced by the Corporation that at the time of submission of the proposal, Gurdev Kaur was suffering from any illness or that she took treatment for any such illness. Thus, the stand of the Corporation as such cannot be accepted. Reference be made to the decision of Haryana State Commission in Life Insurance Corporation of India v. Bidya Devi & Ors., III (1995) CPJ 481=1996 (1) CPR 91. That was also a case where repudiation of the claim was made on the ground that the insured had suffered abdomen pain and had suppressed the same in the proposal form. It was held that there was no major or minor ailment noticed at the time of taking the insurance policy. Further reference be made to decision of this Commission in Life Insurance Corporation of India v. Paramjit Kaur Gill, III (1997) CPJ 35. Ultimately stone was found in the Gall Bladder and the claim was repudiated on the ground that material fact was concealed. It was observed as under : "The learned Counsel could not pin-point any material on the record to indicate that the insured, at any time prior to the taking of the policy or his admission in the P.G.I., was ever aware that he suffered from stone in the Gall Bladder. However, it is the conceded position that the death has occurred on account of the post-operation infection. Even remotely there is no nexus between the cause of death and the alleged mis-statement. On that account, the Life Insurance Corporation cannot be permitted to repudiate the genuine claim of the insured. We cannot be oblivious of the ground realities prevailing in the society in which we live. One can feel pain in stomach because of so many reasons. It is a routine type of trouble which nobody takes seriously. In case the insured person does not make mention of minor pains in the stomach, then on that ground the insurance claim cannot be rejected. Reading of all the questions mentioned in Col. No. 11 of the Proposal Form (supra) together one would infer that the insured is required to disclose the diseases for which he has taken a treatment spread over days continuously. It is not the case of the Insurance Corporation that prior to his admission in the P.G.I. and consultation with Dr. Goel the insured had taken a treatment for stomach pain spread over days. According to us, insured is not required to disclose casual ailment not requiring any serious treatment and consultation. The sickness/ailment which is required to be disclosed is with relation to serious disorder of his health."

Another case came up before this Commission in Life Insurance Corporation of India v. Smt. Jaswinder Kaur & Ors., 1998 (1) CPC 380. That was a case of death caused by renal failure and the illness of dysentery was also noticed. Claim was repudiated on the ground that the deceased had concealed the disease of dysentery at the time of making the proposal. It was held that the repudiation was illegal and the dysentery as such was not such a disease, concealment of which would affect the insurance policy. The National Commission in Life Insurance Corporation of India v. Sanjeev Mahendralal Shah, I (1998) CPJ 45 (NC)=1996 (1) CPR 129, held that the insured was not required to disclose casual ailments not requiring any treatment or consultation with a medical doctor at the time of submission of the proposal for obtaining insurance policy. In view of the consistent decisions as referred to above, in the present case, if Gurdev Kaur had not disclosed the abdomen pain ailment at the time of submitting the proposal, it cannot be held that intention was to defraud the Insurance Company. Mr. B.J. Singh, learned Counsel for the Corporation further relied upon applications for leave and has argued that Gurdev Kaur had taken medical leave and this fact was not disclosed. Such a matter came up before State Commission, Himachal Pradesh in Smt. Raksha Goyal v. Senior Divisional Manager, LIC & Ors., 1997 (2) CPC 32, and it was held that in the absence of any specific material, ground of taking medical leave as such, cannot be considered sufficient to deny the relief. The Insurance Company had not produced true copies of the original documents in that case. The District Forum in the facts of the present case rightly came to the conclusion that there was deficiency in rendering service on the part of the Corporation in not settling the claim and we affirm the finding.

MR. B.J. Singh, learned Counsel for the Corporation has argued that in view of the decision of the Supreme Court in United India Insurance Corporation Ltd. v. M.K.J. Corporation, III (1996) CPJ 8 (SC), that compensation by way of interest at the rate of more than 12% against nationalised insurance companies is not permissible, compensation more than 12% could not be allowed. This matter has been considered by this Commission in detail and it was held that the ratio of the decision aforesaid will not be applicable to the case of Life Insurance Corporation. It is not grant of interest as such, but it is grant of compensation @ 18% on the money value which is considered just compensation. This Commission in Life Insurance Corporation of India v. Smt. Bimla Rani Kapur, 1998 (1) CON.LT 289, held that compensation @ 18% on the insured amount against the Life Insurance Corporation would be just. For the reasons recorded above, finding no merit in the appeal, the same is dismissed with costs of Rs. 500/-. Appeal dismissed with costs.