S.K. CHHABRA vs Divisional Manager, Life Insurance Corporation of India

SMT. B.K. Chhabra, widow of Sh. Gurcharan Singh Chhabra has come up in appeal against order dated 31.10.94 passed by the District Forum, Karnal, whereby her complaint against the Life Insurance Corporation for claiming a sum of Rs. 30,000/- by way of insurance amount after the death of her husband, has been dismissed by holding that as the insured Gurcharan Singh Chhabra had suppressed the fact of his illness at the time of taking the insurance policy, the LIC had rightly repudiated the claim.

THE undisputed facts are, that late Gurcharan Singh got himself insured for an amount of Rs. 30,000/- on 25th May, 1988. THE complainant continued to pay the premium except for a period of six months from June, 1990 to December 1990, when the premium remained unpaid. But, soon thereafter, on 11th February, 1991, declaration of good health was obtained from the insured and policy was revived on 27.3.91. It was about 8 months later that the insured died on24th November, 1991. However, the claim of the widow-complainant was repudiated by the LIC on the ground, that there was concealment of history of ill-health in the past and the injured had infect remained admitted in the Nursing Home from 6th July, 1988 to 20th July, 1988 after taking leave from his employer. This repudiation of the claim of the widow having been up-held by the learned District Consumer Forum, she has come up in an appeal before us. The principal submission made by the learned Counsel, appearing on behalf of the appellant is that there was no question of concealment of the illness as the insured had taken out the Insurance Policy on 15th June, 1988, whereas he died 3 years later i.e., on 24.11.91. Moreover, the precise ailment which is said to be suppressed was only simple Diabetic mellitus, which was not such a serious or complicated disease. Therefore, it was not necessary to be disclosed by the insured at the time of taking out the insurance policy. It is further contended by the learned Counsel for the appellant, that the Life Insurance Corporation, before issuing the policy got her husband medically checked up by their own Doctor, who did not detect any major ailment which could disqualify the insured from taking out the policy.

In reply thereto, the learned Counsel for the LIC has strenuously relied upon number of authorities to contend that the repudiation of the claim of the widow had rightly been made by the LIC as insurance policy had been taken by fraudulent suppression of material facts by the policy holder. According to the learned Counsel, the very fact that the insured had to take leave from his employer was also evident of his involvement into some major ailment.

AFTER hearing the Counsel for the parties, we are of the considered view, that the LIC has wrongly repudiated the claim of the complainant, as there was no suppression much less fraudulent on the part of the policy-holder regarding major or complicated ailment at the time of his taking of the policy. Diabetic Mellitus was not such a complicated disease by the disclosure whereof the LIC would have denied the Insurance Policy to the insured. The mere fact that the insured lived for about three and a half years after getting himself insured, is by itself enough to prove that the ailment he was suffering from was neither complicated nor a serious one. That is why even the Doctor appointed by the LIC for the medical check-up of the insured did not disqualify him from taking out the insurance policy on the ground of illness. Consequently, we have no hesitation in allowing the appeal of the complainant and in setting aside the order of the learned District Consumer Forum. Resultantly, the complaint is allowed and the Life Insurance Corporation is directed to make the payment of the insured amount with @ 18% interest from the date of death i.e., 24.11.91 upto the date of payment, the appellant, shall also be entitled to costs of the litigation which are quantified as Rs. 2,000/-. Appeal allowed with costs.