SAPNA GARG vs Punjab National Bank

-THIS is insurer''s appeal directed against the order dated 27. 1. 2007 passed by the District Consumer Forum, Champawat, allowing the Consumer Complaint No. 15 of 2002 and directing the insurer to pay sum insured under the policies to the complainant within a month from the date of the order along with cost of Rs. 1,000.

THE facts of the case in brief are that the husband of the complainant late Sh. Inder Singh Kunwar had taken two insurance policies on his life for a sum of Rs. 1,00,000 each. The first policy was taken on 28. 3. 2000, while the second one was taken just after one month from the said date, i. e. , on 28. 4. 2000. The insured late Sh. Inder Singh Kunwar died on 25. 6. 2000. When the claim was lodged with the insurer by the complainant, the complainant felt that the Insurance Company was not taking prompt action in regard to the settlement of the claim. Even after serving a legal notice dated 24. 3. 2001, the claim was not settled by the Insurance Company. Upon this, the complainant filed the consumer complaint before the District Forum on 12. 11. 2001. The District Forum allowed the consumer complaint as per impugned order and directed the insurer to pay the sum insured under the two policies held by the deceased together with cost, as stated above. Aggrieved by the said order, the insurer has filed this appeal. We have heard the learned Counsel for the parties and perused the material placed on record in the light of the legal aspect of the case.

The insurance claim submitted by the complainant was repudiated by the insurer on the ground that the insured had concealed material facts in respect of his health at the time of proposing for the insurance. The insured had not taken any policy on his life earlier. The first policy was taken on 28. 3. 2000 and the second one immediately after one month on 28. 4. 2000 and he died just after two months on 25. 6. 2000. Therefore, an inquiry was conducted by the insurer, which revealed that the deceased had been suffering from liver cirrhosis since long and even before taking the insurance policies. The complainant''s stand on this point is that her husband had never told her about the said ailment. It was alleged that before accepting the insurance proposal, the duly appointed Physician of the insurer had examined the insured and had found no such ailment.

WE do not agree with the contention of the complainant because at the time of submitting the proposal form, certain questions are asked in respect of health of the proposer and the Physician appointed by the insurer issues a certificate in the following format on the basis of the information given by the proposer: "i certified that the proposer has signed / put his/her thumb impression in my presence after admitting that all the answers to Question No. 10 and onwards of this form have been correctly recorded. " We feel that the insured had not answered the question Nos. 11 (d) and 11 (i) honestly, which are as follows: questions question answer 11 (d)Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or nervous system? no 11 (i)What has been you usual state of health? good

THE affidavit dated 11. 5. 2001 of the complainant (Paper No. 17/4 of the original record), submitted in connection with the claim, reveals that the deceased was diagnosed in the month of November, 1999 by Dr. Om Prakash of Tanakpur as suffering from liver ailment and was advised regular treatment, but the deceased did not follow the medical advice. This fact corroborated with the purchase of two life insurance policies in the months of March and April, 2000 and death of the insured in June, 2000, indicates the motive behind taking the said policies in quick succession, although in the past, he had never purchased any policy. The complainant, however, denied that she had ever filed such an affidavit admitting the liver ailment of her husband. In her counter affidavit dated 4. 9. 2004 (Paper Nos. 32/2 to 32/4), she has deposed that the affidavit dated 11. 5. 2001 is false and not acceptable because the agent of the Insurance Company had got her signatures on some forms and plain papers for the purpose of completing the formalities for settlement of the claim, but there was no such paper as the said affidavit. She has further stated in the counter affidavit that the name of her husband was Sh. Inder Singh Kunwar, while in the affidavit dated 11. 5. 2001, it has been mentioned as Sh. Inder Bahadur Singh Kunwar. Thus, the affidavit has been prepared by the insurer and the agent of the insurer fraudulently with intent to deprive her from getting the benefit of the insurance policies purchased by her husband. We are unable to accept the above allegations made by the complainant against the insurer and its agent. The insurer is a Public Limited Company incorporated under the Companies Act. Unless it is proved by the complainant that certain officials of the company had some reasons to do so, we fail to understand as to why the insurer and its agent would like to deprive the complainant from getting benefit of the insurance policies. On a careful perusal of the affidavit dated 11. 5. 2001 and the counter affidavit dated 4. 9. 2004, we do not find any variation in the signatures of the deponent (complainant ). Both the affidavits have been notarized. If we disbelieve the contents of the affidavit dated 11. 5. 2001, presuming that the insurer and its agent got it prepared fraudulently, it will be a serious blow to the procedural law of the judicial system. On the other hand, we may understand the reason of filing a counter affidavit on 4. 9. 2004, wherein the aforesaid contents of the affidavit dated 11. 5. 2001 have been denied, because these contents go against the complainant and, therefore, the only way for her escape was to file a counter affidavit. The contents of the affidavit dated 11. 5. 2001 and a certificate dated 14. 1. 2001 issued by Dr. Om Prakash, M. B. B. S. of Prakash Nursing Home, Tanakpur (Paper No. 26), clearly indicates that the deceased had some pre-existing liver disease, but he had concealed this fact at the time of submitting the proposal form.

EVEN if it is argued that the death of the deceased was not due to liver cirrhosis, the insurer was justified in repudiating the claim on the ground that the insured had concealed material fact at the time of submitting the proposal. Moreover, the complainant has also not submitted the report of the doctor, who attended the insured at the time of his death. Instead, it has been stated that the death of the insured was so sudden that the doctor could not be called for the treatment.

LEARNED Counsel for the complainant has also taken the defence that the insured''s proposal was accepted by the appellant after completing the health check-up by a doctor appointed by the insurer and, therefore, the claim cannot be repudiated. He has relied upon a decision of the Hon''ble Karnataka High Court in the matter of Branch Manager, Life Insurance Corporation of India, Kollegal v. Smt. Gayathri, 2007 (2) CCC 794 (Kar.) (DB ). The Hon''ble Karnataka High Court has held in this case that in the absence of acceptable proof with regard to suppression of material facts, insurer cannot be allowed to avoid its liability in terms of the policy. We feel that the facts of the case cited above differ from the facts of the instant case. Firstly, because in the present case, the insured had taken two policies in succession and secondly, the inquiry conducted by the insurer revealed that the insured had been suffering from liver ailment much before the date, when the proposal for the insurance policy was submitted. Learned Counsel for the complainant also cited a decision of this Commission in the case of Life Insurance Corporation of India v. Smt. Meghwati, 2005 UAD 81. The facts of the reported case also differ from the facts of the present case. In Meghwati''s case (supra), the Insurance Company had alleged that the death of the insured had occurred due to blood dysentery and the insured was a chronic patient of blood dysentery, a fact which was concealed. This Commission gave the finding that dysentery is not such a disease, which may ordinarily cause death and there was nothing on record to indicate that the patient (insured) died due to dysentery.

On the contrary, the law settled by the Hon''ble National Commission in the case of Life Insurance Corporation of India v. Krishan Chander Sharma, II (2007) CPJ 51 (NC), is that if the answers given by the deceased to the question Nos. 11 (a), (b), (d) and (i) of the proposal form are found false, the Insurance Company is justified in repudiating the claim.

THE Hon''ble Supreme Court has also laid down legal principles in such insurance matters. In its judgment in Civil Appeal No. 5322 of 2007, P. C. Chacko and Another v. Chairman, Life Insurance Corporation of India and Others, IX (2007) SLT 533=iv (2007) ACC 773 (SC)=vi (2007) CLT 229 (SC), decided on 20. 11. 2007, the Hon''ble Apex Court has observed in para 16 that: "the purpose for taking a policy of insurance is not, in our opinion, very material. It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated if a fraudulent act is discovered. The proposer must show that his intention was bona fide. It must appear from the face of the record. In a case of this nature it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law. " Last but not the least, we have no hesitation in saying that the District Forum not only failed to appreciate the facts of the case but, as a matter of fact, did not apply its mind in delivering the order. Immediately after filing the consumer complaint, the insurer had issued the repudiation letter on 22. 2. 2002 (Paper Nos. 17/9 to 17/12) and it was available on record. The District Forum overlooked this important document. The whole order of the District Forum either contains the facts of the case or the submissions made by the parties, but the analytical part of the order, which leads to conclusion, is so vague and meaningless that it reflects on the judicial competence of the Forum. The relevant portion of the impugned order is reproduced hereunder: "regional matter omitted"

THUS, on an appreciation of the facts of the case as well as legal aspect, we are of the view that the insurer had rightly repudiated the claim. The impugned order is liable to be quashed because of its infirmity and illegality. In view of above, appeal is allowed. Order dated 27. 1. 2007 of the District Forum is set aside and the Consumer Complaint No. 15 of 2002 is dismissed. No order as to cost. Let a copy of the judgment be sent to the District Forum, Champawat, with a direction to take a note of our observations on the impugned order. Appeal allowed.