Senior Divisional Manager, Life Insurance Corporation of India vs SHEELA

LIFE Insurance Corporation of India challenges the order of the District Forum, Ludhiana dated 30th October, 1998, directing payment of Rs. 50,000/- alongwith interest @ 18% p.a, from 13.10.1998 when Investigating Office submitted report in favour of the deceased till realisation.

ALLAH Baksh, husband of the complainant Sheela, Folicy-holder No. 160397811 for a sum of Rs. 50,000/- died on 25.8.1993 leaving behind the complainant, who is nominee. The claim on the basis of insurance policies were made by the complainant before the opposite parties. Since the claim was not settled within reasonable time, the complainant filed a complaint before the District Forum, Ludhiana on 5.6.1996. Life Insurance Corporation - the opposite parties contested the claim on various grounds. The claim was rejected on the ground that the insured had withheld the material information at the time of submission of proposal form (Ex. R-3). It was contended that the insured-deceased was treated by Dr. Shamsher Singh on 21.8.1993 and he was referred to Dayanand Medical College and Hospital, Ludhiana where the history of the insured-deceased was given by one Piara Singh and the insured-deceased was unconscious. The deceased was suffering from Tuberculosis (T.B.) for 10 years and took treatment for the same for one year. It was also asserted that the deceased was also opium addicted. Objection was also raised that the complaint was bad for non-joinder of necessary parties.

The parties led their evidence on affidavits and documents, which resulted in passing the impugned order by the District Forum. The opposite parties not satisfied with the impugned order, are before us.

THE question for consideration in this appeal is as to whether repudiation of the claim by the opposite parties is legal and that does not entitle the complainant to claim compensation on account of deficiency on the part of the Insurance Company. At the out-set, the learned Counsel for the opposite parties raised the question that the Funds of the opposite parties are public funds, the learned Counsel also pleaded that the true facts and correct history was. not disclosed with regard to the past ailment of Tuberculosis. The learned Counsel for the appellants further averred that there was no deficiency on the part of the Corporation in not settling the claim as the insured himself did not disclose the material information at the time of the filling up the proposal form and thus the repudiation was legal.

THE learned Counsel for the respondent argued that the death occurred due to cardiac arrest and not due to T.B. as alleged by the opposite parties. It was asserted that the opposite party has failed to prove that the insured-deceased got treatment for T.B. It was for the Insurance Company to collect material of their own on the basis of which they could repudiate claim. THE history sheet provided by the hospital on the basis of statement of some person is not enough to repudiate the claim. THE investigation was required to be made to collect evidence by the Insurance Company and to produce before the District Forum on the basis of which the claim was repudiated. We have heard the learned Counsel for the parties and have gone through the record. The deceased was an illiterate person submitted his proposal form (Ex. R-3) which is known as "Declaration by the Proposer". According to the declaration form, if the answers and/or signature herein above are/is in vernacular then he/she should declare his/her signature in own handwriting that the replies were given after fully and properly understanding the questions. This column was not meant for the deceased as he was illiterate and put his thumb impression on the form in token of his life was proposed to be assured. One Gursharan Singh has signed. The relevant declaration is reproduced below : "1. Declaration by the person filling in the form: Declarant''s Name and Address ... ... Pin.. I hereby declare that I have fully explained the above questions to the Proposer and I have truthfully recorded the answers given by the Proposer. Sd /-Gursharan Singh Signature of the declarant."

THE above declaration has no meaning as column is incomplete. In fact Column No. 2 which is reproduced below was applicable as the insured was illiterate. "2. In case the proposer is illiterate: His/her thumb impression should be attested by a person of standing whose identity can easily be established, but unconnected with the Corporation and this declaration should be made by him. Name and address of the declarant: ........................................... I hereby declare that I have explained the contents of this Form to the Proposer in..language and that the proposer has affixed the thumb impression above after fully understanding contents thereof. . Signature"

NO one has signed the declaration as required. Ex. R-3 is the proposal form, the proposer had fixed the thumb impression after fully understanding contents thereof. There is no evidence to establish that the proposer was explained the proposal in language known to him and that the proposer had affixed the thumb impression on the proposal form after fully understanding contents thereof. Even, otherwise we have held earlier also that the death occurred within about two years after taking the insurance policy, is not per se a doubtful circumstance to deny the claim to the nominee or beneficiaries under the insurance policy. Mere history given in the hospital by someone is of no consequence. History alone cannot be treated as a valid ground to repudiate the claim. We are not satisfied with the material produced by the opposite parties that the proposer did not disclose the ailment, i.e. Tuberculosis, he was suffering in the proposal form. There is no affidavit of the doctor who diagnosed and treated the deceased for Tuberculosis. No doctor was called into the witness box for examination or cross- examination. Onus was on the opposite party to adduce convincing and cogent evidence to prove that the deceased-insured got treatment from doctor and was required to place on record the particulars of the clinic/hospital and the doctor(s) who diagnosed. The allegation of the opposite party that the deceased was suffering from the ailment of Tuberculosis at the time of filling up the proposal form remained without corroboration and thus the allegation was not established. It is settled law that in case of fraudulent suppression of material information rests heavily on party alleging fraud. In this case Insurance Company cannot wriggle out of liability by simply alleging inaccuracy or falsity of statement in proposal form which is incomplete also In our view, in the present case, in the absence of cogent material adduced by the opposite parties, the repudiation was devoid of merit and was illegal. It is not necessary to refer to all the judgments cited by the Counsel for both the parties on this point.

The law stands settled that in the case of making a claim on the basis of insurance policy which is required to be submitted to the Insurance Company with the claim are the particulars of the insurance policy and the factum of death of the insured well within time. It was for the opposite party-Insurance Company to collect the material of their own on the basis of which they could repudiate the claim and adduce evidence in support thereof. With regard to the arguments that the L.I.C. Funds are public funds, and need care. No specific assertion has been made. Consumer Protection Act, 1986 certainly provides for better protection of the interests of consumers, but we firmly do not allow travelling beyond its scope and jurisdiction. It is not justified to bend the law for the opposite parties being Custodian of Public Fund of the L.I.C. The consumer law is applied to the facts of the case objectively within the built boundaries surrounded by the law. Law of the land is supreme and has to prevail irrespective of the status of the fund, whether public or private, and this is what the justice needs. After considering the facts and the evidence of the case, we do not find any justifiable ground to differ from the findings of the District Forum or interfere with the order of the District Forum as this appeal is devoid of merits. Therefore, this appeal is dismissed with no order as to costs. Order of the District Forum be complied within 30 days from the receipt of the copy of the order of this Commission. Stay order dated 9.3.1999 is hereby vacated. Appeal dismissed.