RUKMINI HEMBRAM vs Branch Manager, L.I.C. of India

THE complainant is the nominee of an L.I.C. policy holder, namely, Kali Charan Hemram, who died on 29.7.1993. THE deceased Kali Charan Hemram had three policies vide policy No. 76366402 dated 28.12.1984 sum assured Rs. 5,000/-, (2) policy No. 5803580334018 dated 6.4.1991 sum assured Rs. 1,00,000/- commencing from 15.3.1991, and (3) policy No. 580336809 dated 5.6.1992 sum assured Rs. 1,04,000/- commencing from 28.3.1992.

AFTER the death of the policy holder, the complainant being the nominee of the policy holder submitted requisite documents along with claim applications for settlement of the claims. The L.I.C. authorities without disputing anything settled the first policy but as regards the other two policies the opposite parties did not settle the claims. The late policy holder was the only earning member of the family. Due to financial difficulties his family members are living with much hardship. The complainant approached several times to the opposite parties but in vain. The complainant wrote a letter to opposite party No. 2 on 6.8.1994 about the delay in settling the claims. The complainant received a letter on 8.9.1994 from opposite party No. 2 that the opposite parties have repudiated the claim of the complainant on the ground that the policy holder had withheld material information regarding health at the time of insurance. The complainant wrote a letter to opposite party No. 3 to consider her case and clarified that out of two policies, one policy has run for one year four months and the other one has run for two years four months. The complainant sent first reminder on 29.12.1994 and next reminder on 17.4.1994 to the opposite party No. 3. On 26.4.1995 she received a letter from opposite party No. 3 that the case had been referred to the Central Office for taking decision but they remained silent. The complainant again wrote a letter on 12.8.1995 to opposite party No. 3 to consider her case. AFTER remaining silent for a considerable period, i.e., from 26.4.1995, the Cuttack Divisional Office issued a letter to the complainant on 19.12.1995 that her claim has been repudiated by the Zonal Claim Review Committee and the Central Office Claim Review Committee. While settling the first claim of the policy No. 76366402 in which sum assured was Rs. 5,000/- the L.I.C. did not raise any dispute for settling the claim. But in respect of the two other policies as the sums assured were higher amount, they have raised objections.

The L.I.C. of India stated that the policy holder did not produce the illness certificate of the employer and also the medical certificate in connection with the past diseases. According to the L.I.C. the policy holder was suffering from fever, stomach trouble and urinary infections.

ON perusal of records we find that those diseases are not fatal and also the policy holder did not withhold material information regarding health. The allegations regarding the illness of the policy holder stated by L.I.C. are common disease in our view. In this respect the complainant relied upon the decisions reported in 1996(3) CPR 229 (NC); Vol. I (2002) CPJ 519; III (1997) CPJ 106 (NC); and 1997 (2) CPR 60 (NC). The National Commission has already held that non-disclosure of minor diseases by the policy holder which are not fatal is not a bar to settle the claim. It is not possible to give regard to the decision taken by the insurer to repudiate the claim, without due application of mind of the insurer to all the relevant facts and circumstances of the case. Even if the case put forward by the insurer that the deceased policy holder had undergone treatment in a hospital, it may be said that the so called ailment for which the deceased was treated in the hospital during the said period has no nexus with the cause of his death.

IN these circumstances, we consider that the decision of the L.I.C. of INdia was not based on proper application of mind to the facts and circumstances of the case. We direct the L.I.C. of India to pay the claim amounts as per the terms and conditions of the policies along with interest at the rate of 10 (ten) per cent per annum from the date of receipt of the claim forms till the date of payment, within two months. The L.I.C. is to deposit the claim amount of the two policies which comes to Rs. 2,04,000/- (Rs. 1,00,000/- + Rs. 1,04,000/-) in this Commission in favour of the complainant along with interest and Rs. 2,000/- (two thousand) towards costs. Complainant''s case is allowed. Complaint allowed.