MANETI RAWAT vs Life Insurance Corporation of India

ON account of repudiation of the claim of the complainant on the ground of non-disclosure of pre-existing disease by the insured-late Shri Laxman Singh Rawat who died due to an accident, the complainant has through this complaint sought compensation of Rs. 14,40,000 in the following components: (i) Rs. 3,00,000 on account of basic sum assured of the policy. (ii) Rs. 3,00,000 on account of accident benefit as the death of the life assured has occurred in an accident. (iii) Rs. 90,000 on account of interest upto 2.8.1998 from the date of death of life assured @ 18% on Rs. 6 lacs i.e. w.e.f. 2.10.1997 to 2.8.1998. (iv) Rs. 7 lacs on account of mental agony suffered by the complainant. (v) Rs. 50,000 on account of litigation expenses and the conveyance etc. and other expenses incurred by the complainant.

ALLEGATIONS of the complainant, in brief, are that late Shri Laxman Singh Rawat, the son of the complainant took 6 LIC policies for Rs. 3,00,000 bearing Nos. 120863298, 99, 300, 302, 302 and 303 all dated 28.3.1997 for Rs. 50,000 each under table 111-30 (i.e. Bima Kiran Policy) and the complainant was nominated as the beneficiary under all the policies being the natural mother and legal heir of the deceased insured person. That the insured Shri Laxman Singh Rawat died in an accident near Sarita Vihar on 2.10.1997. He was quite hale and hearty during the period of his insurance and before the date of insurance when he took insurance policy he was medically examined by the Senior Director of the OP before entering into contract. The deceased never fell ill and had been working again at Taj Palace Hotel, New Delhi as Steward and was only confirmed on 16.8.1997 after the expiry of his temporary employment with them. Before his confirmation he was medically examined by the Government Hospital doctors i.e. as directed by his employer and also all sorts of tests of his blood, stool, urine etc. by the nominated Diagnostic Centre by his employers. On 30.8.1997 general medical examination by the doctors of Government Hospital was also done and he was found absolutely fit and healthy person to perform his duties as a Steward in Taj Palace Hotel.

That the insured person was not in arrears of any premium on account of said insurance policies on the date of his death in the accident.

THAT the complainant fulfilled all the formalities and filed the required forms and furnished information as required by the OP from time-to-time in order to make the payment on account of the above said policies. The OP did not care for making the payment on account of the said policies and OP Nos. 2 and 3 started harassing the complainant and made her shuttle coke among the tables of the officials of the OPs. The OPs alleged that the deceased insured had suffered from fever for which he had consulted a medical practitioner and had taken treatment from him and was on medical leave for 7 days from 13.1.1997 to 19.1.1997 and he did not however disclose these facts in his proposal form thus the deceased had made deliberate misstatements and withheld material information from the OPs and hence in terms of the policy contract and declarations contained in the forms of proposal of assurance the OP repudiated the claim. Hence this complaint

THE OP-LIC denied any deficiency in service on its part and raised the following pleas: (i) In view of the fact that claim was a very early one, investi-gation was made by the OP Corporation about the bona fides of the claim as per its procedure. THE investigation revealed that late Shri Laxman Singh Rawat was an Epileptic and had undergone treatment for Epilepsy in Holy Family Hospital and he also suffered from other illness before taking the said insurance policies. (ii) THE material facts concerning his health were withheld and not disclosed by him in his proposal form. (iii) That the exact cause of death of late Shri Laxman Singh Rawat is still under investigation by the police authorities and the final inquest report is still awaited. (iv) Shri Laxman Singh Rawat was treated for Epilepsy and as well as other illness before taking the insuance policies which were not disclosed by him in his proposal form dated 28.3.1997. THE contract of insurance has become null and void due to non-disclosure of material facts concerning his health by the proposer.

The complainant has produced and proved the following documents: (i) Copy of Medical report dated 30.8.1997 from Satwik Diag-nostic Centre for his appoint-ment to Taj Palace Hotel showing that the deceased was examined as a candidate for the employment in the Taj Palace Inter Continental Hotel and was not suffering from any communicable disease or constitutional or bodily de-formity except ''None''. (ii) Offer of appointment letter dated August 16, 1997 from Taj Palace Hotel. (iii) Copy of post-mortem report by Department of Forensic Medicine and Toxicology, New Delhi showing the cause of death as under: "Death in this case is due to head injury caused by blunt force which can be serious rail accident." (iv) Copy of Inquest Report dated 2.4.1999 under Section 174, Cr.P.C. by the P.S. Sarita Vihar.

The OP has referred to and relied upon certificate dated 20.4.1999 of the hospital treatment and the information given by the hospital in Columns 3, 4, 5, 8 and 9 are under: 3.Under whose treatment was the patient before he was admitted into the hospital? If the patient had brought a letter or a note from any doctor at the time of admission kindly furnish us with certified copy thereof. OPD. Holy Family Hospital 4.While at the time of admission what was (a) the nature of his complaint. Filament seizures. (b) the duration of the complaint reported by him. Since 1992 February 5.What was the exact history reported by the patient at the time of admission (Full history including the dates, duration of the ailments, the symptoms narrated, etc. to be given) Headache Gen. Conclusion on 10.8.1993 and 13.8.1993 8.What was the date of his condition when he was discharged from hospital. Discharged on 18.8.1993. Recovered and advised follow up treatment. 9.What was his condition when he was discharged from hospital. Recovered and advised follow up treatment.

WE have accorded careful consideration to the rival contentions of the parties. There is no dispute that the deceased was subjected to rigorous medical tests by the doctors of the OP to ascertain the state of health of the deceased insured at the time of obtaining the policy. The certificate relied upon by the OP shows that the insured was discharged on 19.8.1993 and was fully recovered. But was advised follow up treatment. Instant policy was taken in the year 1997 i.e. after 6 years he was having been declared fit and recovered. If a person had been recovered fully from a disease before obtaining the insurance policy is not supposed to disclose the disease from which he suffered 10 years before and was fully recovered and such disease cannot be termed as a pre-existing disease. It is only in the near proximity of obtaining the policy that a person undergoes some hospitalisation and operation and conceals that particular disease then the Insurance Company may invoke exclusion clause but not otherwise.

ON the concept of meaning and import of ''disease'' and ''pre-existing disease'' in terms of the insurance policy, we have discussed in extenso in case after case and some of the conclusions in this regard are as under (i) "Disease" means a serious derangement of health or chronic deep-seated disease frequently one that is ultimately fatal for which an insured must have been hospitalised or operated upon in the near proximity of obtaining the medi-claim policy.

(ii) Such a disease should not only be existing at the time of taking the policy but also should have existed in the near proximity. If the insured had been hospitalized or operated upon for the said disease in the near past, say, six months or a year he is supposed to disclose the said fact to rule out the failure of his claim on the ground of concealment of information as to "pre-existing disease".

(iii) Malaise of hypertension, diabetes, occasional pain, cold, headache, arthritis and the like in the body are normal wear and tear of modern day life which is full of tension at the place of work, in and out of the house and are controlable on day-to-day basis by standard medication and cannot be used as concealment of ''pre-existing disease'' for repudiation of the insurance claim unless an insured in the near proximity of taking of the policy is hospitalised or operated upon for the treatment of these diseases or any other disease.

(iv) If insured had been even otherwise living normal and healthy life and attending to his duties and daily chores like any other persons and is not declared as a ''diseased person'' as referred above he cannot be held guilty for concealment of any disease, the medical terminology of which is even not known to an educated person unless he is hospitalised and operated upon for a particular disease in the near proximity of date of insurance policy say few days or months.

(v) Disease that can be easily detected by subjecting the insured to basic tests like blood test, ECG etc. the insured is not supposed to disclose such disease because of otherwise leading a normal and healthy life and cannot be branded as ''diseased person''.

(vi) Insurance Company cannot take advantage of its act of omission and commission as it is under obligation to ensure before issuing medi-claim policy whether a person is fit to be insured or not. It appears that Insurance Companies don''t discharge this obligation as half of the population is suffering from such malaises and they would be left with no or very little business. Thus any attempt on the part of the insurer to repudiate the claim for such non-disclosure is not permissible, nor is ''exclusion clause'' invocable.

(vii) Claim of any insured should not be and cannot be repudiated by taking a clue or remote reference to any so-called disease from the ''discharge summary'' of the insured by invoking the ''exclusion clause'' or non-disclosure of ''pre-existing disease'' unless the insured had concealed his hospitalisation or operation for the said disease undertaken in the reasonable near proximity as referred above

(viii) Day-to-day history or history of several years of some or the other physical problem one may face occasionally without having landed for hospitalisation or operation for the disease cannot be used for repudiating the claim. For instance an insured had suffered from a particular disease for which he was hospitalised or operated upon 5, 10 to 20 years ago and since then had been living healthy and normal life cannot be accused of concealment of ''pre-existing disease'' while taking medi-claim policy as after being cured of the disease, he does not suffer from any ''disease'' much less the ''pre-existing disease''.

(ix) For instance, to say that insured has concealed the fact that he was having pain in the chest off and on for years but has never been diagnosed or operated upon for heart disease but suddenly lands up in the hospital for the said purpose and, therefore, is disentitled for claim bares dubious design of the insurer to defeat the rightful claim of the insured on flimsy ground. Instances are not rare where people suffer a massive attack without having even been hospitalised or operated upon at any age say for 20 years or so.

(x) Non-disclosure of hospitalisa-tion/or operation for disease that too in the reasonable proximity of the date of medi-claim policy is the only ground on which insured''s claim can be repudiated and on no other ground.

On the aforesaid premise we find that claim of the complainant was wrongly repudiated with a view to reject the claim on highly flimsy and trivial grounds.

In the result, we allow the complaint in the following terms: (i) OP shall pay Rs. 3,00,000 towards the basic sum assured of the policies. (ii) OP shall also pay an equal sum of Rs. 3,00,000 on account of accident benefit as the death of the life assured has occurred in an accident. (iii) Besides this OP shall pay Rs. 50,000 as compensation and cost of litigation for the mental agony and harassment suffered by the complainant.

PAYMENT shall be made within one month from the date of receipt of this order. Complaint is disposed of in aforesaid terms.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room. Complaint allowed.