SHAHIDA KHATOON vs Life Insurance Corporation of India

THIS complaint has been filed by Smt. Shahida Khatoon under Section 12 of the Consumer Protection Act (hereinafter referred to as ''COPRA''). It is alleged that late Mukhtar Ahmad, the husband of the complainant Smt. Shahida had purchased a policy No. 280057972 by paying its first premium on 23.7.1987. It is said that Mukhtar Ahmad died on 14.8.1988 when some surgical operation was being performed upon him. The date of birth of Mukhtar Ahmad is said to be 15.7.1960 and it is alleged that he did not suffer from any illness nor was he being treated in any hospital. The policy was said to be for Rs. 1.00 lac under Table Term 88/25 and consequently it was alleged that accidental benefits were also payable to the complainant''s husband.

IT is alleged that another policy No. 59206500 was also purchased by the husband of the complainant. On the death of complainant''s husband policy claim was registered through letter/application dated 17.8.1988. The original death certificate, original policy and the original certificate relating to date of birth of Mukhtar Ahmad were furnished to L.I.C. Authorities. IT is said that LIC did not reply quickly but ultimately in June, 1990 repudiated the claim of the complainant re. policy No. 280057972 and intimated the said decision to the complainant in December, 1990. A complaint was filed by the complainant in the District Consumer Forum, Gorakhpur which returned the complaint on 17.5.1991 observing that since the amount of claim would go beyond Rs. 2.00 lacs the said Forum did not have jurisdiction to proceed with the complaint.

Consequently on 17.5.1991 cause of action arose when the complaint was returned by the District Forum for presentation before proper Court, whereupon instant complaint has been filed before this Commission. The prayer in the complaint relates to only policy No. 280057972 for Rs. 2.00 lacs with bonus and interest upto date and no claim with regard to other policy No. 59206500 has been made by the complainant.

ON registering the complaint the Commission issued notice to respondents who have filed their written statement. The case pleaded by respondent L.I.C. was that the claim made was not maintainable for various reasons including the one that there was material concealment in the proposal and, therefore, no decree could be obtained by the complainant. The Commission on examining the facts held by judgment dated 15.9.1992 that the complainant was not entitled for any decree and dismissed the complaint.

FIRST Appeal No. 101 of 1993 was filed by Smt. Shahida Khatoon complainant before the Hon''ble National Commission. L.I.C. also went upto the Hon''ble National Commission through Appeal No. 505/1992. It appears that LIC filed the appeal because it was of the view that some of the observations contained in the judgment went against the regulations. Smt. Shahida Khatoon was aggrieved because of having failed totally in the complaint. Both matters came up before the Hon''ble National Commission for hearing when the matter was remanded by its judgment dated 28.3.1994 with the following observations : "....The case will go back to the State Commission for fresh disposal as indicated above. The parties will bear their respective costs in the proceedings before this Commission."

This is how the complaint came up for consideration afresh in pursuance of the directions of the Hon''ble National Commission.

THE first order was passed on 4.8.1994 by the erstwhile President permitting the complainant to furnish and produce such evidence as she may be having for hearing of the complaint in persuance of the remand order.

ON 6.10.1994 one Mohd. Hashim, Advocate appeared for the complainant who was allowed to file affidavit on fresh evidence as suggested by the complainant by 10.11.1994 and it was further directed that Counsel for the respondents Mr. Prabhakar Johri be informed of the above date. On 10.11.1994 the case was not taken up and so was the result on 4.4.1995 and 14.9.1995. When the case was taken up on 8.11.1996 it has been noted in the order sheet that the complainant and his Counsel were absent while Counsel for opposite parties was present. Fresh notices were sent to the complainant. On 24.1.1997 and 19.2.1997 case could not come up for hearing.

On 24.3.1999 Counsel for the complainant moved an application seeking adjournment which was allowed and 28.4.1999 was fixed for filing additional evidence by the complainant and the opposite parties. When the case came up on 28.4.1999 Mr. Arjun Bhargava appeared for L.I.C. and it has been noticed that neither the complainant nor her Counsel was present on the said date. Consequently another opportunity was allowed and the case was directed to come up on 17.5.1999. The order sheet further indicates that when the case came up on 17.5.1999 again Mr. Arjun Bhargava was present but nobody appeared for the complainant. Thereafter running order sheet should have shown page 10 but it shows page 11 which has an order passed by erstwhile President on 9.12.1999. It is obvious that some irregularity may have occurred in filing of these order sheets and compiling them into one set but it does not affect the merits of the matter because reverse of said number has page 11. This has the order passed on 1.7.2002 by the erstwhile Commission including the then President, its Member and one of us and the said order reads as under : "Mr. Arjun Bhargava appears for L.I.C. but he is not present. Let parties be informed on SPS for filing additional evidence by 20.8.2002."

THE said order sheet further indicates that notices were sent. When the case came up on 21.8.2002 Mr. Prabhakar Johri sought adjournment which was allowed and 10.9.2002 was fixed on which date adjournment request was again made and the case was directed to come up on 8.10.2002. The order dated 17.10.2002 which was passed by the then Senior Member and one of us reads as under : "Counsel for the parties are present. Put up for arguments on 14.11.2002." 14.11.2002 "Mr. Alok Srivastava for the complainant is present and wants to proceed with the matter. Learned Counsel for LIC is absent. Put up tomorrow again for final disposal."

It appears that the said order sheet has not been placed before Commission for signatures. However, the order sheet dated 15.11.2002 reads as under : "Mr. Alok Srivastava for the complainant. Mr. Prabhakar Johri for the opposite party. Heard arguments. Judgment reserved."

THIS is one of the matters in which after hearing the parties judgment was reserved but before the judgment was prepared and delivered one of the Members ceased work. In the interest of justice this case along with other remaining cases of such nature were listed for further hearing. In view of the above this matter again came up for hearing on 12.12.2002 and thereafter on 13.12.2002, the office has listed the matter in the normal course today for final disposal. Mr. Arjun Bhargava and Mr. Prabhakar Johri for L.I.C. is present while nobody is present on behalf of complainant.

THE aforesaid discussion would, therefore, indicate that the matter was already heard and no further request has been made by the complainant''s Counsel for further hearing of the matter nor any such request has been made by Mr. Arjun Bhargava, Counsel for L.I.C.

ONLY point now for consideration is, whether the proposer had made any such concealment in the proposal which could entitle the L.I.C. to repudiate the claim registered by complainant Shahida Khatoon, widow of Mukhtar Ahmad. No other question is involved. The gist of the submissions made in the complaint has already been given above. The consistent pleading of L.I.C. has, therefore, been that : (a) The medical report was filled in by Dr. T.N. Dwivedi and Dr. Lal Jit Singh accepting the averments made in the proposal form as correct and only on the basis of those medical reports Policy No. 280037972 was issued. (b) Mukhtar Ahmad was suffering from cancer and he had concealed the said material fact while filling in the various columns in the proposal form. In question Nos. 18 and 20 the assertion made by the proposer Mukhtar Ahmad was that he was suffering from no ailment whatsoever. (c) It is asserted by L.I.C. that at the time of medical examination by the Board relating to the proposal submitted by a citizen for insurance cover outward medical examination alone is done and no internal medical examination takes place. (d) The fact that the proposer was suffering from cancer was known to him prior to the taking of the policy which he intentionally concealed while making the proposal. In this connection L.I.C. has relied upon the report of Dr. M.R. Kamat who is Physician in Tata Memorial Hospital Mumbai. Copy of his report has been filed as Annexure-5 to the written statement. (e) It is the case of LIC that so far as policy No. 59206500 is concerned a claim was registered on the death of Mukhtar Ahmad which was settled by LIC because that could be done under the Regulations relating to the settlement of the policy claim and, therefore, the complainant has not made any demand with regard to the insurance claim concerning policy No. 59206500. It is subsequent policy No. 280057972 which was forwarded with a wrong proposal, which had concealment as detailed above and, therefore, LIC was entitled to repudiate the claim on the basis of the regulations. (f) The claim made by the complainant is not entertainable and it should not be decreed at all because the proposal contains concealment as noted above. It has been reiterated that proposer was suffering from Testicular Tumour - N.S.G.C. with cancer.

LIC could not bypass the regulations and settle the claim in favour of the complainant on any compassionate ground because the proposal suffers with material concealments noted above.

Mr. Arjun Bhargava and Mr. Prabhakar Johri for L.I.C. today reiterated that the concealment is proved beyond doubt and, therefore, no case for decreeing the complaint is made out. The judgment delivered by the Commission earlier on 15.9.1992 does indicate that specific reference was made to the aforesaid concealment of the proposer in the policy. Reference has been made at this stage to LIC''s report about the Physician attached to Tata Memorial Hospital, Mumbai indicating that the repudiation was based upon the alleged concealment made by the proposer in the proposal form. Specific finding has been recorded that the proposer wanted to extend economic help to his wife in the event of his death and it was with that feeling that he purchased second policy concealing the fact that he was suffering from cancer. It is true that while these facts may have been placed before Hon''ble National Commission, it was of the view that no discussion was there on this point. Mr. Arjun Bhargava is contending that on these facts if placed in detail the Hon''ble National Commission may well have been pursuaded to uphold the final decision of the Commission. In view of the above discussions there is no merit in the complaint. The complaint is dismissed accordingly. Costs easy. Let a copy of this order be issued to the parties as per rules. Complaint dismissed.