Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Prem Narain, Presiding Member
Life Insurance Corporation of India —Petitioner
versus
Somenath Karmakar —Respondent
Revision Petition No.2189 of 2018
(Against the Order dated 22/03/2018 in Appeal No. 759/2016 of the State Commission West Bengal)
Decided on 13.7.2020

Advocates:
Counsel for the Parties:
For the Petitioner:Mr. Neeraj Gupta, Advocate and Ms. Gaytri, Advocate
For the Respondent:Mr. Rajashi Datta, Advocate

IMPORTANT POINTS
(1) Insurance Company is authorised to repudiate claim on the basis of information not filed by proposer in proposal form.
(2) Information in respect of other diseases and information in respect of treatment given by some doctors cannot be considered as material information withheld fraudulently.

Headnote:
(A) Insurance Act, 1938 – Section 45 – Consumer Protection Act, 1986 – Sections 15, 17, 19 and 21 – Insurance – Death claims were repudiated on the ground that DLA had not disclosed the material information in respect of her pre-existing diseases – Death has occurred after two years from date of policy and under Section 45 of Insurance Act, 1938, Insurance Company cannot repudiate claim unless it is proved that some material information was suppressed fraudulently – Fact is that some of pre-existing diseases mentioned by Insurance Company are lifestyle diseases like hypertension, which are quite common – Information in respect of other diseases and information in respect of treatment given by some doctors cannot be considered as material information allegedly withheld fraudulently – Insurance Company has not been able to prove that this information was fraudulently concealed by insured – Commission inclined to give benefit of Section 45 of Insurance Act 1938 to complainant. (Paras 13 and 15)
(B) Consumer Protection Act, 1986 – Sections 15, 17, 19 and 21 – Insurance Act, 1938 – Section 45 – Insurance – Death claims were repudiated on the ground that DLA had not disclosed the material information in respect of her pre-existing diseases – Insurance is a matter of utmost good faith and parties are required to disclose full information – District Forum has not actually examined issue of pre-existing diseases as raised by opposite party in repudiation letter – District Forum has mainly passed order on the ground that no proof was given before District Forum for explaining different aspects of policy to DLA by Insurance Company or its agent – District Forum has not examined evidence given by opposite party – However, claim was allowed – State Commission has dismissed appeal on the ground that Section 19 of Indian Contract Act demands that due diligence should have been made by Insurance Company – In a way, State Commission says that existing diseases of DLA should have been discovered by Insurance Company – This is not a sound argument and insurance being a matter of utmost trust, it was duty of the DLA to have disclosed all diseases that she was suffering from – If proposal form has not been signed by DLA, no insurance can be claimed by nominee of DLA in the policy because proposal must have been signed by somebody else, then insurance policy becomes void ab initio – Repudiation for claim under policy No. 457650539 is valid as Insurance Company is authorised to repudiate claim on the basis of information not filed by proposer in proposal form. (Paras 17, 18 and 20)
Result: Revision Petitions Partly allowed.

ORDER

These revision petitions have been filed by the petitioner Life Insurance Corporation of India (LIC) against the order dated 22.3.2018 of the State Consumer Disputes Redressal Commission, West Bengal, (in short ‘the State Commission’) passed in FA No.759/2016 and FA No.760/2016.

RP No.2189 of 2018

2. The brief facts of this case are that the respondent/complainant is the husband of the deceased life assured (DLA). The proposal was filed on 28.02.2012 and the policy no.457228976, Jeevan Tarang started from 15.3.2012. The sum assured was Rs.5,00,000.

RP No.2190 of 2018

3. The brief facts of the case are that the complainant is the husband of the deceased life assured (DLA). In this case, the proposal was signed on 29.7.2013 and the policy No. 457650539, Jeevan Saral became effective from 30.7.2013. The sum assured was Rs.6.25 lacs.

4. Life assured died on 19.10.2014. The claims under the policies were filed by the complainant. However, the claims under the policy for Rs.6.25 lacs was repudiated on 21.1.2015 and the claim under the policy for Rs.5,00,000/- was repudiated on 26.2.2015 and the claims were repudiated on the ground that the DLA had not disclosed the material information in respect of her pre-existing diseases. In fact, one repudiation letter mentions the following:-

“In this connection, we have to inform you that in the proposal for Assurance dated 28.02.2012 signed by the deceased assured, she had answered the following Questions as under noted:

QUESTIONS:

Q.No.11 in Proposal: ANSWERS:

a. During the last five years did you consult a Medical Practitioner for any ailments 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 ground of health during the last five years? NO

d. Are you suffering from or have you ever suffered from ailments pertaining to liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system? 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 diseases? NO

f. Did you ever have any bodily defect or deformity? NO

g. Did you ever have any accident or injury? NO

h. Do you use or have you ever used?

i. Alcoholic Drinks NO

(ii) Narcotics NO

(iii) Any other drugs NO

(iv) Tobacco in any form NO

j. What has been your usual state of

health? GOOD

We may, however, state that all these answers were false as we have evidence and reason to believe that before she proposed for the above policy she was suffering from HTN, Hypothyroidism and Rheumatic Arthritis Disease. For this captioned health problem, she was under the treatment of Dr. Krishnendu Dey (Prescription dated 01.12.2010), Dr. K.Ghosh Hazra (prescription dtd. 05.08.2011) and Dr. Partha Pratim Pan (Prescriptions dated 13.09.2011, 12.10.2011 and so on). Hence it is clearly evident that the deceased Life Assured was not in sound health at the time of signing this proposal. She had not however, disclosed these facts in her proposal instead she gave false answers therein as stated above.

It is therefore, evident that she had made deliberate misstatement and withheld material information from us regarding her health at the time of effecting the assurance and hence in terms of the policy contract and the Declaration contained in the forms of proposal for Assurance, 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 stand forfeited.

We enclose herewith our leaflet styled “why is a Life Insurance Claim repudiated” which is self-explanatory.”

5. On similar grounds, the other policy was also repudiated. The complainant then filed a consumer complaint before the District Forum, Siliguri. On contest the District Forum

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