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PUNJAB STATE CONSUMER DISPUTEs
REDRESSAL COMMISSION, Chandigarh
Hon’ble Mr. Justice R.S. Mongia, President;
Mr. C.P. Budhiraja & Mrs. Jasbir Kapoor, Members
LIFE INSURANCE CORPORATION OF INDIA—Appellant
versus
GURBAZ SINGH—Respondent
Appeal No. 807 of 2003—Decided on 11.7.2006
For the Appellants :Mr. Rajneesh Malhotra and Mrs. Vandanaa Malhotra, Advocates.
For the Respondent:Mr. A.K. Khunger, Advocate.
The main legal point established in the judgment is that a life insurance policy cannot be called into question on the ground of misstatement after two years from the date of commencement of the Insurance Act, unless the insurer shows that the statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder.
Headnote:
Insurance - Life Insurance Policy - Insurance Act, 1938, Section 45
Fact of the Case:
The complainant's mother had a life insurance policy with the appellant. The appellant repudiated the claim on the grounds of incorrect information provided by the deceased regarding her health at the time of effecting the assurance.
Finding of the Court:
The court found that there was no withholding of material facts or any wrong answer that would materially affect the contract. The court also referred to Section 45 of the Insurance Act, 1938, which states that a policy of life insurance cannot be called into question on the ground of misstatement after two years from the date of commencement of the Act.
Issues: The main issue was whether the appellant's repudiation of the claim was justified based on the alleged incorrect information provided by the deceased.
Ratio Decidendi: The court held that there was no evidence of fraud on the part of the deceased and that the repudiation of the claim was not well-founded. The court also emphasized the provisions of Section 45 of the Insurance Act, 1938, to support its decision.
Final Decision: The court dismissed the appeal, finding no merit in the appellant's arguments, and ordered the amount deposited by the appellants to be remitted to the respondent.
Mr. Justice R.S. Mongia, President—This is an appeal by the Insurance Company against the judgment and order of the District Forum dated 8.4.2003 by which the complaint of the complainant was allowed in the following terms:
“9. In view of the above discussion we are of the considered view that the complainant proved his case and thus we accept the complaint with direction to opposite parties to pay death claim under policy No. S 130113236 purchased by Gurdev Kaur along with interest @ 12% P.A. from the date of maturity till its realization. We further direct the opposite parties to pay Rs. 5,000 as cosolidated compensation for mental tension and harassment and litigation expenses. The above directions be complied with within one month from the date of receipt of copy of order. Copy of order be sent to the parties free of cost. File be consigned to records.”
2. Brief facts giving rise to this appeal may be noticed:
Mrs. Gurdev Kaur mother of the complainant had taken a life insurance policy from the Life Insurance Corporation of India (appellant) (in short “LIC”) in the sum of Rs. 50,000. The insurance commenced on 15th of June, 1999. Gurdev Kaur died on 26th of August 2001. Claim was lodged by the complainant with the LIC for the payment of the insurance amount. However, the LIC repudiated the claim vide letter dated 31st of March 2002/25th of April, 2002. The repudiation letter Ex. C-2 reads as under:
“Life Insurance Corporation of India
Ref. Claims/DCR/80-02 Regd. A.D.
31.3.2002/25.4.2002
Shri. Gurbaz Singh,
S/o Smt. Gurdev Kaur,
W/o Sh. Balwant Singh,
Gali No. 1, Deep Nagar,
Kotkapura Road,
Distt. Muktsar.
Dear Sir,
Re: Repudiated Death Claim u/policy No. S/130113236 fvg. Smt. Gurdev Kaur (Decd).
With reference to your claim under the above policy on the life of your deceased mother, we have to inform you that we have decided to repudiate all liability under the policy on account of deceased having withheld correct information regarding her health at the time of effecting the assurance with us.
In this connection, we have to inform you that in the proposal for assurance dated 15th June, 1999/Personal Statement signed by the deceased assured on 15th June, 1999 she had answered the following questions as under noted:
Questions
Answers
11. (a) During the last 5 years did you consult a medical practitioner for any ailment requiring treatment for more than a week?
No.
(b) Have you ever been admitted to any hospital or nursing home for general check-up, observation treatment or operation?
No.
(c) Have you remained absent from place of work on grounds of health during the last 5 years?
No.
(e) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?
No.
(i) What has been your usual state of health?
Good.
We may, however, stated that all these answers were false as we hold indisputable proof to show that she had been suffering from non-insulin dependent Diabetes Mellitus with Diabetic nephropathy some years before the proposal date. She did not, however, disclose these facts in her proposal papers. Instead she gave false answers therein as stated above.
It is, therefore, evident that she had made incorrect statement and withheld correct information from us regarding her health at the time of effecting the assurance and hence in terms of policy contract and the declarations contained in the forms of proposal for assurance and personal statement, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belong to us.
In case you are not satisfied with our above decision and feel that we have not considered any particular fact and circumstances in support of your claim, you may send your representation within a month for re-consideration of your claim to our Zonal Office at the following address—
The Zonal Manager,
LIC of India,
