ZUBAIDA QURESHI vs POST MASTER GENERAL, M.P. Circle

THIS appeal is directed against the order dated 26.8.2002 passed in Case No. 545/2001 by the District Consumer Disputes Redressal Forum, Bhopal (for short the "District Forum").

FACTS giving rise to this appeal are thus : Late B.K.Qureshi the life assured, husband of the appellant gave three proposals for obtaining three Postal Life Insurance Policies; one dated 6.7.1996 for the sum assured of Rs. 20,000/- premium Rs. 195/- monthly to be deducted from pay recovery in which certificate of immediate superior was signed by the Head Record Officer, Mr. J.P. Shriwas and with a declaration of DO/FO (PLI) and Certificate of Medical Officer, Dr. A.K. Shrivastava; second dated 1.3.1997 for the sum assured of Rs. 1,00,000/- premium of Rs. 975/- monthly to be deducted from pay reecovery in which certificate of immediate superior was signed by the Head Record Officer with a declaration of DO/FO (PLI) and Certificate of Medical Officer, Dr. R.K. Gupta; and third dated 11.11.1997 for the sum assured of Rs. 1,00,000/- amount of premium Rs. 1,095/- to be deducted from pay recovery in which certificate of immediate superior was signed by the Head Record Officer, Mr. J.P. Shriwas and with a declaration of DO/FO(PLI) and Certificate of Medical Officer, Dr. A.K. Shrivastava for obtaining Life Insurance Policies. In the three proposals in answer to query No. 16(a) and (b) about the "Personal History" of Sound Health the answer given was "Yes" and in relation to the diseases enumerated therein including diabetes, the answer was "No". The Postal Authorities accepted the proposals and issued Policy Nos. M.P./47513-P, M.P./50600-P and M.P./53672-P for the sum assured of Rs. 20,000/-, Rs, 1,00,000/- and Rs. 1,00,000/- respectively. Between the first and second policy, there was a gap of 1 year, while in between second and third, there was a gap of 8 months. The life assured died on 20.1.2001 due to renal failure and respiratory cardiac arrest. The appellant submitted a claim which was repudiated on the ground that the life assured gave a false declaration in answer to query about the good health as the life assured suffered from carbuncle (diabetes mellitus) and obtained medical leave for a period of 15 days from 2.1.1995 on the basis of the medical certificate for non-gazetted officers recommended for leave or extension or commutation of leave issued by the Chief Medical Officer, P & Y Dispensary No. 1, Bhopal, hence, the claim was repudiated vide letter dated 26.3.2001 on the ground of suppression of material fact. The appellant filed a complaint, which was resisted. The District Forum after appreciation of evidence held that before issuing the policies, the life assured ought to have been medically examined the form of medical certificates is the part of the proposal which do not bear the signatures of the Doctor, who examined the life assured at the time of giving the proposals. From the photocopy of the medical certificate dated 2.1.1995 it is evident that the life assured took medical leave for the sickness of carbuncle (Diabetes mellitus) for a period of 15 days, the fact of which was suppressed. Therefore, relying on the decision of the National Commission in case of Senior Divisional Manager v. Smt. Raksha Goel, II (2002) CPJ 92 (NC), held that the repudiation of the claim was justified.

The Postal Authorities have filed an application under Order 41 Rule 27 of the Code of Civil Procedure dated 22.4.2003 to take the original certificate dated 2.1.1995 and letter of Prabhari Mukhya Chikitsa Adhikari dated 17.2.2001 on record wherein it is stated that the certificate dated 2.1.1995 was issued by Dr. A.K. Nigam in which Dr. Nigam has written the illness of carbuncle (Diabetes mellitus) and on its increase beyond control, it became the cause of death.

TRUE the contract of insurance are ubberimae fide. They are founded upon utmost good faith. If one party fails to observe this utmost good faith, the contract may be avoided by the other, therefore, the obligation is cast upon both the parties to deal fairly and honestly in equal degree. In these contracts, the contracting parties are placed under a special duty towards each other not merely to refrain from the active misrepresentation, but to make full disclosures of all material facts within their knowledge. From the proposals of the three policies, it is evident that the proposals dated 6.7.1996, 11.11.1997 wherein the name of Medical Officer is written, which bears the signatures of proposer, but not of the Medical Officer, while the proposal dated 1.3.1997 bears not only the name of Medical Officer, Dr. R.K. Gupta, but initials and signatures of the proposer. In the proposal forms that is a form of Notice for Medical Officer for examination of the proposer which gives certain instructions to the Medical Officer, like, all cases irrespective of the amount of insurance required where there are two or more cases of diabetes in the family report of Glucose Tolerance Test of Urine would be required and where the proponent is over-weight in addition to the family history of diabetes or there is suspicion of sugar in the urine or personal history of glycosuria blood sugar report would be necessary. If the proposer is to take the policy of the sum to be assured of Rs. 25,000/- or more and the proponent is over-weight or has doubtful family history an electro cardiogram and a report on the screening of the chest would be required.

HOWEVER, it is not known that in spite of the three certificates of Medical Officer, which is a part and parcel of the proposal form and one of them bears the signatures of Medical Officer whether the instructions were complied with by the Medical Officer given in the Notice for Medical Officer, which is also a part of the proposal form. The Postal Authorities have not produced any record now filed any affidavits of these doctors to state that whether instructions given in the Notice for Medical Officer were complied with or not and factually tests and ECG were performed or the Certificates issued by the Medical Officer were issued without examining the proposer. Admittedly, all the three policies had run for more than two years and regular premium till the death of the deceased was deducted from the salary of the life assured. In such circumstances, the repudiation of the claim was in second part of Section 45 of the Insurance Act, 1938. Therefore, the policies could not have been called in question by an insurer on the ground that the statement made in the proposal for insurance or any report of the Medical Officer leading to the issue of the policy was inaccurate or false, unless it is pleaded and proved that such statement was on a material matter to disclose and that it was fraudulently made, the burden of which lies on the insurer. The Supreme Court considered the question in case of Mithoolal Nayak v. Life Insurance Corporation of India, AIR 1962 SC 814, wherein the Supreme Court laid down three conditions of the applicability of second part of Section 45 of the Insurance Act, 1938 which are extracted thus : (a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.

To discharge the burden for application of second part of Section 45, the insurer has placed only a certificate of Dr. A.K. Nigam, taking leave for 15 days which was much prior to submission of the first proposal. The insurer has also not placed any material that the life assured suffered from the said disease at the time of submitting the three proposals more particularly when in the proposal there is a Notice for Medical Officer giving instructions and after careful examination has to issue certificate about the good health and then to recommend acceptance of the proposal for the Postal Life Insurance Policy by the Post Master General. In such circumstances, even if the original certificate dated 2.1.1995 and its clarification by the Chief Medical Officer which are filed by the respondents are considered, in that case too it is not established that the life assured fraudulently suppressed the material fact of sufferance of carbuncle (Diabetes mellitus).

THE proposal form is not like that of LIC proposals where there is a query whether proposer suffered from such diseases since last 5 years. In the circumstances, the insurer was bound to plead and prove that the life assured continuously suffered and was suffering from diabetes at the time of submission of proposal, the fact of which was fraudulently suppressed. In such circumstances the decision of the National Commission in Senior Divisional Manager, LIC v. Smt. Raksha Goel (supra), in the circumstances has no application and is distinguishable on facts, as the respondents Postal Authorities have failed to discharge their burden of fraudulent suppression of the ailment by leading evidence. Hence, the repudiation of the claim in our opinion was not justified.

IN view of the above, we direct the respondents to pay the amount of sum assured with all benefits of the three policies along with interest on the amount payable at the rate of 6 per cent per annum from the date of filing of the complaint i.e. 20.12.2001 and Rs. 1,000/- as costs of the proceedings throughout within a period of two months from the date of receipt of certified copy of this order. In the result, the appeal is allowed. The order of the District Forum is set-aside and the complaint is allowed. A copy of this order be conveyed to the parties and a copy be sent to the District Forum along with the record of the case. Appeal allowed.