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CHANDIGARH CONSUMER DISPUTES REDRESSAL COMMISSION
K.C. Gupta, President, Maj. Gen. S.P. Kapoor and Devinderjit Dhatt, Members
LIFE INSURANCE CORPORATION OF INDIA AND ANR. - Appellants
Versus
SARABJIT KAUR - Respondent
Appeal Case No. 822 of 2007
Decided on : 20-03-2008
Life Insurance Corporation of India - Insurance Claim - Consumer Protection Act, 1986, Section 24A - The court discussed the facts of the case, the repudiation of the insurance claim, and the evidence presented. It highlighted the legal provisions related to the duty of the insured to disclose material information, the requirement for the insurer to prove fraudulent suppression of facts, and the need for careful consideration in repudiating claims. The court also referenced previous judgments to support its decision.
Fact of the Case:
The respondent's husband had a life insurance policy with the appellant. After his death, the insurance claim was rejected based on alleged non-disclosure of health information. The respondent filed a complaint alleging deficiency in service.
Finding of the Court:
The court found that the insurance claim was wrongly repudiated as the insurer failed to prove fraudulent suppression of material facts by the deceased. It also noted that the medical history presented by the respondent was not binding and did not establish non-disclosure by the deceased.
Issues: The key issue was whether the insurance claim was rightfully repudiated based on the alleged non-disclosure of the deceased's health information.
Ratio Decidendi: The court held that the insurer must prove fraudulent suppression of material facts by the policyholder and that the decision to repudiate claims should be made with extreme care and caution, as per the Consumer Protection Act, 1986, Section 24A. It also emphasized the need for careful consideration of medical evidence and previous judgments.
Final Decision: The appeal by the Life Insurance Corporation of India was dismissed, and costs of Rs.10,000 were imposed.
ORDER
K.C. Gupta, President - This appeal has been directed by opposite parties 1 and 2 i.e. Life Insurance Corporation of India against order dated 10.10.2007 passed by Consumer Disputes Redressal Forum-II, U.T.Chandigarh (hereinafter to be referred as District Consumer Forum), vide which complaint of respondent Smt. Sarabjit Kaur was accepted with costs of Rs. 2,500 and appellants were directed to pay Rs.1,30,000 along with interest @ 9% p.a. from the date of repudiation of the claim i.e. 27.9.2000 till the date of payment and further to pay Rs.10,000 as compensation for harassment and mental agony.
2. Briefly stated the facts are that Sh. Chattar Singh was husband of Smt. Sarabjit Kaur respondent (complainant). He was employed as XEN, MC, PH Division No. 3, Chandigarh. He got his life assured by taking LIC policy dated 28.3.1999 (Pension scheme) for the sum assured of Rs.1,30,000 under Table 122-13.13 Schedule PNGS-G102. The premium of Rs.10,368 which was payable on yearly basis was paid by him. The date of annuity was 28.3.2012 with the last premium payable upto 28.3.2011. The copy of the insurance policy is Annexure C-1.
3. It was next averred that Sh. Chattar Singh suddenly fell ill on 23.12.1999 and was got admitted in medical emergency of PGI where he breathed his last on 25.12.1999.
4. It was further averred that after his death, respondent being his wife and nominee under the policy submitted her claim on 5.5.2000 with the appellant along with all other relevant documents but Life Insurance Corporation of India rejected the claim on the ground that Sh. Chattar Singh withheld material information regarding his health at the time of effecting the insurance and gave false answers to the questions mentioned at serial No.11(b)(c)(e) of the proposal form dated 31.3.1999 as he had been a diabetic (type 2 diabetes mellitus) for the last 10 years and suffered a stroke (CEREBRO- Vascular Accident) in 1993. The copy of the repudiation letter dated 27.9.2000 is Annexure C-2.
5. It was next averred that respondent has requested the Zonal Manager vide letter dated 10.11.2000 to reconsider her claim as the pleas taken in the repudiation letter dated 27.9.2000 were not correct. The copy of the letter is Annexure C-4. Thereupon, Zonal Office asked the Senior Divisional Manager, LIC, Chandigarh to send the file for reviewing the claim by Zonal Office, New Dehli vide letter nnexure C-5 dated 16.11.2000. Thereafter, several letters were written Annexures C-9 to C-15. Ultimately it was revealed when she had written letter to the Central Public Information Officer of LIC, Divisional Office, Chandigarh under Right to Information Act, 2006 that her review application had been rejected on 25.6.2001 and the copy of the letter dated 5.2.2007 is annexure C-19.
6. Alleging deficiency in service, the complaint was filed on 23.2.2007.
7. Life Insurance Corporation of India contested the complaint and filed written reply. It is stated that the policy in question was issued on the basis of proposal form and personal statement dated 31.3.1999 and believing averments made therein to be true. However, later on information was received that Sh. Chattar Singh was admitted in PGI on 23.12.1999 where he expired on 25.12.1999. It next stated that the claim of respondent had been rightly repudiated after considering all the relevant facts including medical certificate issued by PGI, Chandigarh. It further stated that Chattar Singh had made material concealment of information about his previous bad health and the repudiation made by it was legal as it had been made on the basis of medical record of life assured.
8. Parties adduced their evidence by way of affidavits.
9. After hearing Counsel for the parties, District Consumer Forum vide order dated 10.10.2007 accepted the complaint with costs as stated in the earlier part of the judgment.
10. We have heard Mr. B.S.Walia, Advocate for appellants, Sh. Dayal Singh, father of respondent in person and carefully gone
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