RAJENDRA vs Life Insurance Corporation of India

THE complainants are the husband and son of late Smt. Sushantha. Late Smt. Sushantha had taken a Life Insurance Policy covering her life for a sum of Rs. 1,00,000/- from the opp. party - the Life Insurance Corporation of India. THE proposal given by her is at Ex. R.3 and the policy issued is at Ex. C.I. THE policy was issued on'' 28.3.1986. Complainant No. 1 her husband is the nominee under the said policy.

LATE Smt. Sushantha expired on 20.1.1988 after delivery of the child. Complainant No. 2. It is the case of the complainants that the delivery of the child was normal full time confinement. The complainants further averred that imposition of Special Clauses 4 and 4(b) to the policy were neither with the consent of late Smt. Sushantha nor imposition of the said Clauses 4 and 4(b) were intimated to late Smt. Sushantha. Late Smt. Sushantha completed her full pregnancy; gave birth to Complainant No. 2 and unfortunately died due to post pregnancy medical accident i.e., due to anaesthetic problems resulting in the Cardiac Arrest and death.

The complainants made claim after the death of late Smt. Sushantha with the opp. party for the insured amount. But the opp. party repudiated the claim of the complainants stating that the death of the life assured Smt. Sushantha occurred due to causes attributable to first pregnancy and therefore the complainants were not entitled to the insured amount but their liability was limited to refund the total amount of premium paid under the policy.

THE complainants on receipt of the said repudiation letter filed a claim petition claiming the amount of the policy with interest thereon. The opp. party filed its version admitting the fact that late Smt. Sushantha had taken the Life Insurance Policy as referred above by the complainants. The opp. party averred that the said policy was issued subject to Special Clauses 4 and 4(b) as death of Smt. Sushantha had occurred for the reasons directly or indirectly attributable to pregnancy and so the liability of the opp. party was restricted to refund of the premium paid on the policy till then.

THE opp. party nextly averred that the policy was issued on 28.3.1986 and Smt. Sushantha expired on 20.1.1988 and so she had sufficient time to go through the contents of the policy bond and when she has not taken any objection for Clauses 4 and 4(b), it must be presumed that she had consented for the same. The opp. party on the basis of these averments sought the complaint to be dismissed. During enquiry Complainant No. 1 examined himself as C.W. 1, the L.I.C. Agent, who had taken the proposal, Ex. R.3 from late Smt. Sushantha, examined as C.W. 2 and got Exs. C.I to C.17 marked in evidence. The opp. party examined its underwriter as R.W.I and got Exs. R.1 to R.11 marked in evidence.

WE heard the learned Counsel for the parties, and perused the material on record.

HAVING regard to the pleadings of the parties and the submissions made by the learned Counsel for the parties, the points that arise for our consideration are: (a) Whether late Smt. Sushantha, the life assured, was aware of the special conditions Clauses 4 and 4(b) imposed in the Life Insurance Policy Ex. C.1 ? (b) Whether the death of the deceased Smt. Sushantha was directly or indirectly attributable to her pregnancy ? (c) To what relief the claimants are entitled to ?

Regarding Point No. (a): 12 Ex. R.3 is the proposal form. The life assured i.e., Smt. Sushantha has signed the said form in Hindi. She has also mentioned before she put her signature in the said form stating that the contents of the form were explained to her in Hindi. Thereafter she had signed it. The proposal form is in English. 13. Ex.R.4 is the School Leaving Certificate of Smt. Sushantha. It shows that she had passed S.S.L.C. examination. C.W.I the husband of Smt. Sushantha has stated in his evidence that she had studied up to P.U.C. 14. C.W.2 is the L.I.C. Agent who had taken the proposal form Ex. R.3 from late Smt. Sushantha. C.W. 2 has in this regard stated thus: "... I have filled in Ex. R.3. Before filling it I explained the contents to Smt. Sushantha in Hindi and after she gave her answers I filled in the form.. Deceased Sushantha knew Hindi well so I explained her in Hindi. Sushantha has made an endorsement in Ex.R.3 in Hindi before signing it. Agents are informed of the acceptance of the proposal by the L.I.C...."

Therefore, it is clear that late Smt. Sushantha the life assured knew Hindi well and he C.W.2 got the contents of the proposal form translated in Hindi to her and then she signed it. 15. The learned Counsel for the opp. party submitted that Smt. Sushantha, the life assured, was an educated lady and so it cannot be said that she was not told about the pregnancy clause or she had not read it. The learned Counsel for the opp. party relied upon the decision of the National Commission in Consumer Education & Research Society & Anr. v. Life Insurance Corporation of India & Anr., reported in II (1994) CPJ 77 (NC), wherein at Para 8 of its order it is observed as under: "8. The State Commission has also held that if the assured i.e; Kumari Virbala had been told about the elimination of the pregnancy clause on a demand of Rs. 50/- more for Rs. 10,000/-, she might have opted to pay that amount and that in any case the Corporation should have waived the pregnancy clause in the circumstances of the case. We are of the opinion that the said observation made by the State Commission is not correct. As noticed above Kumari Virbala was an educated lady. There is nothing on record to show that she was not told about the pregnancy clause or she had not read it. Moreover, it was for her to acquaint herself about the terms of the policy which she was going to take from the Corporation. She was a graduate and a teacher. In fact these facts go against the assured and not against the Corporation. We are of the opinion that the State Commission was not justified in assuming that the assured might have opted for paying Rs. 50/- more as premium for the policy had she been told about the said clause of the policy."

In the present case, it is clear that the life assured was only a Matriculate. She did not know English well. So the contents of the proposal form in English were read over by the L.I.C. Agent C.W. 2 in Hindi and thereafter the life assured made a note in Hindi and put her signature to the proposal form in Hindi. 17. R.W.1 is the Under-Writer of the opp. party. He has stated that the proposal of late Smt. Sushantha was accepted subject to the conditions of Clauses 4 and 4(b). R.W.1 has stated that it was not necessary for him to obtain the consent of the proposer before imposing Condition No. 4. It was for the agent to inform the proposer about the conditions imposed. R.W.1 has in this regard stated thus: "It was not necessary for the to obtain the consent of the proposer before imposing Condition No. 4. It was for the Agent to inform her about the conditions imposed, only when there is request for waiver LIC is considering."

R.W.1 has in the cross-examination stated thus: "I did not convey my decision to impose conditions 4 and 4(b) either to the proposer or to the Agent. My decision was given to the Branch Manager. The fact of imposition of conditions of 4 and 4(b) is conveyed to the proposer in the first premium receipt. The cyclostyled copies of Clauses 4 and 4(b) are normally sent along with the first premium receipt. I do not know whether they were sent along with the first premium receipt issued to the proposer in this case. The Branch prepares the policy bond. I do not know whether copies of Clauses 4 and 4(b) were sent to the proposer along with the policy. ... ... Clause 4 is not imposed on all females who propose to insure their lives...."

It is clear from the evidence of this. witness R.W.1 that the special conditions Clauses 4 and 4(b) imposed on the insurer were not conveyed either to the proposer or to the Agent. 19. C.W.2 is the Agent who had taken the proposal form Ex.R.3 from the life assured Smt. Sushantha. C.W.2 in this regard has stated thus: "... The agent will forward the proposal form to the Insurer. The Insurer decides whether Clauses 4 and 4(b) should be imposed or not on a female to be insured. After receiving the proposal the LIC takes the decision in consultation with its Under-writer. Since 1982 Clause 4 is not imposed. For imposition of either Clause 4 or Clause 4(b) the LIC has to obtain the consent of the proposer. Clause 4 is not a statutory clause. A copy of the letter written by the LIC to the proposer for giving her consent for imposition of those clauses, is sent to the Agent. I did not receive the copy of that letter in respect of deceased Smt. Sushantha. So far as I know no such letter was written to the proposer in this case. Even when Clause 4 was to be imposed on a female proposer residing in a rural area, it could have been waved if she agreed to pay one time enhanced premium. No such option was given to the deceased Smt. Sushantha by the L.I.C...."

This would clearly go to show that Clauses 4 and 4(b) the special conditions, imposed were not conveyed to the proposer the life assured. 21. R.W.1 the under-writer who put this Special Conditions 4 and 4(b) has specifically stated that he has not conveyed the imposition of these conditions to the life assured. The Agent who had taken the proposal Ex. R.3 has also stated that no such special conditions imposed was conveyed to the life assured. 22. As referred above, the life assured was not such an educated lady and she knew only Hindi well and the special conditions Clauses 4 and 4(b) imposed were not intimated to her. 23. Ex. C.I 7 is the acceptance letter-cum-first premium receipt. That shows that the proposal was accepted at ordinary rates with 4 and 4(b). Only figures 4 and 4(b) has been mentioned. This receipt does not show that the Special Clauses 4 and 4(b) were attached to this receipt. Subsequently, Ex. C.I the policy was sent to the life assured. There is also no material on record to show that the Special Clause 4 was attached to the said policy bond Ex. C.I. 24. HAVING regard to these facts and in the circumstances of the case, we are constrained to hold that the life assured late Smt. Sushantha was not aware of the Special Clauses 4 and 4(b) imposed by the opp. party. In view of this fact, we hold point (a) in favour of the complainants and against the opp. party. Re. Point No. (b): 25. The Special Clause 4, which has been marked as Ex. R. 8(a) read as under: "Clause No. 4: LIFE INSURANCE CORPORATION OF INDIA Ref: First Pregnancy Clause referred to in the Acceptance Letter issued in connection with Proposal No. Notwithstanding anything within-mentioned to the contrary, it is hereby declared and agreed that should the death of the life assured occur as a result of pregnancy or from any cause directly or indirectly attributable to pregnancy the Corporation''s liability shall, in case such pregnancy has occurred before she has had a normal full time confinement, be limited to either: (a) A sum equal to the total amount of premium (exclusive of extra premiums) paid under this Policy, without interest, less any sums paid by the Corporation in respect of bonuses in cash, portions of sum assured or of surrender value or otherwise; OR (b) The surrender value of the policy, whichever shall be the greater but shall not exceed in any case the amount which would otherwise have been paid at death. Sd/- P. Divisional Manager."

As far as Clause 4(b) is concerned, this is a clause regarding death of the life assured occurring as a result of intentional self-injury, suicide or attempted suicide, insanity, etc. C.W. 1 has stated that Smt. Sushantha, his wife, died about half an hour after delivery of the child, Complainant No. 2. C.W.I has in this regard stated thus: "... On 20.1.1988 my wife had a normal delivery at Ichalkaranji. She gave birth to complainant No. 2 on that day. About an hour after normal delivery my wife expired."

In the cross-examination C.W.1 has stated thus: "My wife did not have a normal delivery. She had to undergo caesarean operation. I was told that my wife died about 35 to 40 minutes after delivery."

Ex. R. 10 is the Medical Attendant''s Certificate which shows the primary cause of death as ''Cardiac Arrest''. The secondary cause as Hypoxia. In the said certificate at Clause 11, the cause of death is stated thus: "It was a death due to anaesthetic accident during operation."

Ex. R.11 is the certificate of hospital treatment. It shows that Smt. Sushantha was admitted in the hospital on 20.1.1988. Her condition at the time of her admission has been described as patient was in labour and the presentation was breech. In the said certificate the history of the patient has been referred as under: "Patient was primipara full term and was in labour."

It is clear from this material that it was a full time confinement. Birth of Complainant No. 2 took place by caesarean operation. About half an hour after the delivery Smt. Sushantha expired. 30. The medical certificate Ex. R.10 shows that the death of the deceased was due to cardiac arrest. It further showed that the death of the deceased was due to anaesthetic accident during operation. In our opinion, these circumstances do not show that the death of the deceased was as a result of pregnancy or from any cause directly or indirectly attributable to pregnancy. Smt. Sushantha had a full time confinement. 31. The learned Counsel for the opp. party submitted that as the delivery of the chi Id was by caesarean operation, so it cannot be said to be a normal delivery. The National Commission in the case in Consumer Education & Research Society & Anr''s. case cited supra, with regard to caesarean operation has observed at Para 10 thus: "10. From the record before us we find that Smt. Virbala died on 22nd July, 1968. The cause of death was "cardiac arrest". There "is no indication that cardiac arrest was a consequence of the caesarean operation she had undergone immediately before her death. It has only been stated in the Corporation''s counter that because of the intense nervous conditions during the caesarean operation, there was cardiac arrest which the doctors could not prevent. Cardiac arrest can be from many causes and at times from an unknown cause. In the absence of any definite medical finding that the cardiac arrest in this case was a consequence of the caesarean operation, we cannot accept the contention of the respondent-Corporation that the death of the deceased was the result of pregnancy and caesarean operation and that the pregnancy clause was attracted in this case. We cannot also overlook the fact that in the practice of modem medicine caesarean operation has become almost a routine procedure......." 32. HAVING regard to the fact that the delivery was due to caesarean operation, it cannot be said that it was not an ordinary full time confinement. As referred above, the National Commission has observed that caesarean operation now-a-days has become almost a routine procedure. 33. In the present case, the medical report clearly showed that the death of the deceased Smt. Sushantha unfortunately was due to Anaesthetic accident during operation. 34. These circumstances do not show that the death of the deceased Smt. Sushantha was as a result of pregnancy, directly or indirectly attributable to the pregnancy. 35. HAVING regard to these facts, we are therefore of the view that the repudiation of the claim under the policy was not justified and the services rendered by the opp. party, in our opinion, were deficient in nature. 36. HAVING regard to these facts, we hold and record point No. (b) against the opp. party. 37. Regarding Point No. (c): In view of our finding on points (a) and (b), as referred above, the complainants are entitled to the Life Insurance amount under Ex. C.1 i.e., a sum of Rs. 1,00,000/-. 38. The death of the. deceased, the life assured, took place, as referred above, on 20th January, 1988 and the repudiation of the claim of the complainants made by the opp. party, in our opinion, as detailed above, is unjustified and so the complainants are entitled to a reasonable sum of interest over the said amount of Rs. 1,00,000/-. 39. In the result, therefore, this complaint is allowed. The opp. party The Life Insurance Corporation of India is directed to pay a sum of Rs. 1,00,000/- with interest at 12% per annum from 1st July, 1988 till the date of its payment to the complainants. 40. The opp. party shall also pay a sum of Rs. 2,000/- to the complainants towards costs of this proceeding. The opp. party shall pay the sums so awarded to the complainants within a period of 60 days from this date. Complaint allowed with costs.