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ANDHRA PRADESH STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, HYDERABAD
Honble Mr. Justice A. Venkatarami Reddy, President;
Mrs. J. Ananda Lakshmi & Mr. K. Ranga Rao, Members
DIVISIONAL MANAGER, LIC OF
INDIA & ORS.—Appellants
versus
T. VENKATESHWARLU—Respondent
F.A. No. 855 of 1996
INSURANCE - REPUDIATION OF LIABILITY - SECTION 45 OF THE INSURANCE ACT, 1938 - SUPPRESSION OF MATERIAL FACTS - NEXUS BETWEEN SUPPRESSED AILMENT AND CAUSE OF DEATH - ARBITRARY REPUDIATION.
Fact of the Case:
The complainant's wife took out an "Ashadeep policy" from the opposite party Insurance Company for Rs. 1 lakh and paid two half yearly premiums. She died on 22.4.1994 due to heart attack. The complainant, as the nominee, filed a claim, but the opposite parties repudiated their liability, alleging that the assured had suppressed material facts in the proposal form.
Finding of the Court:
The District Forum held that the repudiation was illegal and arbitrary, as there was no nexus or cause relationship between the suppressed ailment (abdominal T.B.) and the cause of death (heart attack). The National Commission upheld the District Forum's decision.
Issues: Whether the suppression of material facts by the assured vitiates the policy, even if there is no nexus between the suppressed ailment and the cause of death.
Ratio Decidendi: The court held that the repudiation of liability by the Insurance Company was arbitrary and not based on proper application of mind to the facts and circumstances of the case. The court relied on the decision of the National Commission in Smt. B. Chinnamma v. Divisional Officer, LIC of India, which held that the so-called ailment for which the deceased was treated in the hospital had no nexus whatever with the cause of his death.
Final Decision: The appeal was dismissed, and the order of the District Forum was upheld.
Mr. Justice A. Venkatarami Reddy, President—One T. Sailaja Rani wife of the complainant in OP 351/95, District Forum, Nizamabad took an "Ashadeep policy" from the opposite party Insurance Company for Rs. 1 lakh on 13.11.1993 and paid two half yearly premiums and died on 22.4.1994 due to heart attack at Hyderabad. The complainant who is a nominee and husband preferred a claim. But the opposite parties repudiated its liability. Questioning that the repudiation is illegal and arbitrary, the above complaint was filed to direct the opposite parties to pay the amount covered by the policy with interest etc.
2. The opposite party Insurance Company admitted the issuance of the policy. According to them as the death occurred within six months from the date of commencement of the policy, the case was investigated and the investigation revealed that the assured suffered from Abdominal T.B. from 1.4.1991 to 31.5.1991 and suppressed the same in the proposal submitted on 13.11.1993. Hence the repudiation is valid and the complaint is liable to be dismissed.
3. On behalf of the complainant PWs 1 to 6 were examined and Exs. A-l to A-18 were marked. The opposite parties did not adduce any oral evidence but Exs. B-l to B-3 were marked.
4. The District Forum after referring to the evidence of PWs 3,5 and 6 i.e. doctors who stated that the heart attack on account of which the assured died is not related to abdominal T.B. and back pain held that as the death cannot be said to have been caused due to any ailment said to have been suppressed by the assured and there is no nexus or cause relationship between two i.e. T.B. and heart attack the repudiation is bad and therefore directed the opposite parties to pay the insured sum within one month alongwith bonus and interest and costs of Rs. 500/-.
5. Questioning the said order, this appeal is preferred by the opposite party Insurance Company.
6. It is submitted by the learned Counsel for the appellants that according to Section 45 of the Insurance Act, 1938 any suppression of material facts by the assured vitiates the policy, and therefore even if there is no relationship or nexus between the ailment not disclosed in the proposal form and the actual cause of death, since there is suppression of material fact, the policy is vitiated and the Insurance Company is not liable to pay any amount under the policy.
7. But this takes us to the next question whether there need not be any nexus whatsoever between the ailment for which the deceased was treated in the hospital before the proposal and the cause of patient's death.
8. In order to appreciate the aforesaid contention, it is necessary to refer to the relevant evidence on record, PW 1 admitted in his evidence that the assured took leave on medical grounds from 1.4.1991 to 31.5.1991 and from 1.6.1991 to 30.6.1991 and a Certificate dated 2.7.1991 was issued by the Assistant Surgeon, District T.B. Centre which shows that she suffered from T.B. It is also clear that she again applied for leave from 5.11.1992 to 25.11.1992. PW 2 the LIC agent stated that the assured answered the questions in his presence and the panel doctor examined her physically and certified her health condition. PW 3 Dr. D. Narayan Rao who conducted apendicitis operation on the assured issued a Certificate Ex. A-15 dated 11.11.1992 stated that he came to know that the assured died due to Miocarditis, that me apendicits is not in any way related to the cause of death of the patient. PW 4 Dr. Chandramala issued a Certificate Ex. A-18 and PW 5 Dr. G. Kaulaiah issued a Certificate Ex. A-14 dated 23.1.1995 stating that he treated the assured for back-pain. It is in no way related to Miocarditis and the heart attack is not related to appendisectomy, tuberculosis and back pain. PW 6 working in T.B, Centre who treated the assured stated that the patient was treated for abdominal T.B. for about 3 months as evidenced by Ex. B-2 Fitness Certificate. Ex. B-3 Medical Certificate and that T.B. does not i
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