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2009(2) CPR 52 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
Ashok Bhan, President and B.K. Taimni, Member
Life Insurance Corporation of India
& Others —Petitioners
versus
Smt. K.A. Chandrakala —Respondent
Revision Petition No. 691 of 2005
Decided on 19.3.2009
Counsel for the Parties:
For the Petitioner:Mr. Mohinder Singh and Ms. Diksha Ahuja, Advocate.
For the Respondent:Mr. Muneesh Malhotra, Advocate.
IMPORTANT POINT
Life Insurance Policy is to be governed by the principle of “utmost good faith” on part of both parties.
Headnote:Consumer Protection Act, 1986—Section 21(b) —Jeevan Shri Policy—Death of life assured —Repudiation of claim made under sixth policy on ground that life assured had suppressed material facts regarding change in his health status while taking sixth policy—Complaint—Allowed by District Forum—Appeal—Dismissed in State Commission—Revision petition—Life Insurance policy is to be governed by principle of “utmost good faith” on the part of both the parties—Instantly, life assured inspite of knowing that he was suffering from cancer, yet decided not to reveal same in proposal form on account of which insured failed on criteria of “utmost good faith” —Cancer is a serious disease and in good faith, life assured ought to have disclosed information regarding disease from which he was suffering—Orders passed by Foras below set aside—Complaint dismissed. (Paras 9 to 13)
Result: Revision petition allowed.
Ashok Bhan, President— Life Insurance Corporation of India-petitioner herein, which was the opposite party before the District Consumer Disputes Redressal Forum, Kodagu, Madikeri (hereinafter referred to as ‘the District Forum’ for short), has filed the present revision petition.
2. Shortly stated, the facts of the case are:
Life assured S. M. Arun Kumar approached the Life Insurance Corporation, Madikeri Branch on 30.1.2002 for obtaining Jeevan Shree Policy on his life for a sum of Rs. 5,00,000. After considering the feasibility of the proposal, a policy for Rs. 5,00,000 was issued under the policy bearing No.721339844, which commenced w.e.f. 28.1.2002. On 4.4.2002, complainant informed the petitioner that the life assured had died and submitted the claim in respect of the following six policies:
S. No. Policy No. Sum Assured (Rs.)
1. 614475837 12,000
2. 620050882 25,000
3. 720316557 42,000
4. 720389163 1,00,000
5. 61477316 1,75,000
6. 721339844 5,00,000
3. The petitioner settled the claim of the respondent in respect of the above mentioned first 5 policies but repudiated the claim made under the 6th policy on the ground that the life assured had suppressed the material facts regarding the change in his health status while taking the 6th policy. Petitioner being aggrieved filed a complaint before the District Forum.
4. District Forum directed the petitioner to pay a sum of Rs.5,00,000 along with interest @ 12% p.a. from the date of repudiation till the date of payment with accrued bonus. Cost of Rs.1,000 were also imposed. Being aggrieved, the petitioner filed an appeal before the Karnataka State Consumer Disputes Redressal Commission, Bangalore (hereinafter referred to as ‘the State Commission’ for short), which has been dismissed by the impugned order.
5. District Forum as well as the State Commission held that on the date on which the life assured took the 6th policy, there was no change in the health condition of the life assured or, in any case, he was not aware of the change in his health condition. The life assured died due to cardiac arrest which has nothing to do with the disease which the life assured had allegedly suppressed.
6. Counsel for the parties have been heard at length.
7. S.M. Arun Kumar died on 5.3.2002. As the claim under the 6th policy had arisen within 2 years from the date of commencement of the policy, the petitioner conducted an investigation regarding the genuineness of the claim. It was revealed during investigation that the life assured had consulted Dr. Keshava Murthy V. on 30.1.2002 who found that the deceased had a history of difficulty in swallowing and referred him to higher center for endoscopic examination and evaluation. Deceased was then examined in the Karnataka Cardio Diagnostics Centre, Mysore. The report of the Karnataka Cardio Diagnostics Centre, Mysore reads as follows:
“Gross: Specimen consists of few gray white tiny bits of tissue. Entire specimen submitted.
Micro: Sections show normal stratified squamous opithelium overlying sheets and nests of malignant glandular epithelial cells infiltrating between muscle bundles.
Impression: Infiltrating adenocarcinoma signet ring cell type”
On 17.4.2002, Dr. Victor gave the following certificate:
“This is to certify that Mr. S.M. Arun Kumar was referred to me on 1.2.2002 with difficulty in swallowing. He underwent endo-scopic examination on 1.2.2002 and biopsy was taken on the same day. It was confirmed to be infiltrating adenocarcinoma from histopathological examination on 1.2.2002. He was referred for further treatment to other centers.”
8. The reports clearly spells out that the petitioner was suffering from infiltrating adenocarcinoma, i.e. cancer.
9. It has repeatedly been held that the Life Insurance Policy is to be governed by the principle of “Utmost Good Faith” on the part of both the parties. In the present case, in our considered opinion, both the Foras below erred grievously on this account. The life ass
