Some decisions on repudiations coming out of State Commissions during March-April 2011:
- Branch Manager, Life Insurance Corporation of India & Ors. Vs. Tara Sahoo, First Appeal No.435 of 2006, decided by Hon'ble Orissa State Consumer Disputes Redressal Commission, Cuttack on March 23, 2011:
Fact: When the life assured-policy holder proposed for revival of the policy, he was suffering from ulcerated bleeding bites and was under treatment, which fact was suppressed by him in his fresh proposal form while answering to the questionnaire pertaining to his health condition. For such suppression of material fact, LIC repudiated the claim of the complainant-nominee. Reliance was placed on the certificate of treatment of the life assured in the Sub-Divisional Hospital, Talcher obtained by LIC subsequent to the death of the life assured. The treating doctor, in column 7 of the form, had mentioned that the life assured was having ulcerated bleeding bites (external) and his suffering from piles was for about one year. The death of the life assured was due to tetanus.
Held: The disease the life assured was suffering from was not at all fatal. It was simply an external bleeding piles and death of the life assured having been attributed to tetanus, the cause of death cannot be said to have any nexus with the disease. The Forum has rightly found the complainant to be entitled to the assured amount (Rs. 40,000) and has awarded the same. However, the District Forum has exceeded in awarding compensation of Rs.50,000/- on the face of the prayer of the complainant for award of Rs.10,000/- towards compensation and litigation expenses. The same is reduced to Rs.5,000/-. Repudiation was rightly set aside. Appeal dismissed.
- Branch Manager, Bajaj Allianz Life Insurance Co. Ltd. & Anr. Vs. Halema Bewa & Anr., First Appeal No.208 of 2010, decided by Hon'ble West Bengal State Consumer Disputes Redressal Commission, Kolkata on April 13, 2011:
Held: The impugned order of the District Forum, on its face, appears to have been passed on consent between the parties. Since no Appeal lies against a consent order, this Appeal is not maintainable in law. Appeal dismissed.
- HDFC Standard Life Insurance Co. Ltd. & Anr. Vs. Kailash Chandra Agarwal, Appeal No.1026 of 2008, decided by Hon'ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur on April 13, 2011:
Fact: As per the policy, in case of open heart surgery, the insured amount was payable. The Complainant had undergone angiography test and it was found that there were severe blockages in the main coronary arteries and the Complainant was advised to go for by-pass surgery. On the basis of this report, the claim was filed but the same was repudiated on the ground that the Complainant had been suffering from diabetes for the last eight years and had taken insulin mixtard also. This fact was known to him but he did not disclose this fact at the time of taking the policy and thus suppressed the material information from the Insurance Co. The evidence on record is a copy of Bed Head Ticket (BHT) of Tongia Heart & General Hospital, Jaipur.
Held: So far as the fact of insulin being taken by the Complainant is concerned, there is no period mentioned since when the insulin was started. If there had been specific period, showing the treatment before taking the policy, the matter would have different. To say that the insured is known case of DM for the last eight years, is not a sufficient proof justifying repudiation of the claim. The Insurance Co. should have held an inquiry also to find out whether the Complainant was really suffering from diabetes for the last eight years. Where no treatment record prior to proposal is produced, the repudiation on the basis of hospital record is not justified. In Surinder Kaur & Ors. Vs LIC of India & Ors. 2005 (II) CPJ 32 (NC), Hon'ble the National Commission observed that if the Doctor who treated the deceased had recorded the case history, that was not sufficient to say that information was given by the insured. The case history given in the record may be just based on hearsay and remained unsubstantiated without there being any medical evidence or the statement of insured persons himself or the Complainants. It could just be recorded on the basis of ignorant attendants. In 2008 (II) CPJ 59 National Insurance Co. vs Smt. Swaraj Jain, this Commission has held that past history recorded in hospital's BHT not to be treated as primary evidence, unless Doctor who recorded history had been produced. The Insurance Co. has failed to place on record any documentary evidence to indicate that the insured had taken the treatment for diabetes before the policy. The contention of the Insurance Co. that the insured had been suffering from diabetes is not acceptable in absence of any evidence in support. Repudiation was rightly set aside. Appeal dismissed.
- Geetabai Kumawat Vs. LIC, Appeal No.18 of 2005, decided by Hon'ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur on March 31, 2011:
Fact: Policy had lapsed on account of non-payment of half yearly premium. DLA had passed away after the grace period.
Held: Repudiation was correctly upheld by the District Forum. Appeal dismissed.
- Life Insurance Corporation of India Ltd. Vs. Smt. Radha Devi, Appeal No.
1543 of 2009, decided by Hon'ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur on March 17, 2011:Fact: Claim for three policies issued in 2007 were repudiated on the ground that the LA before submitting proposal forms had suffered from Kidney stone for which an operation was performed but he did not disclose this fact while taking the insurance policies, rather he gave false information. Pre-dating hospital record pre-dating proposal has been placed on record to show that DLA was admitted in this hospital on 9.12.2002 for the treatment of renal calculi. An operation was performed and the stone was removed. The insured was discharged from the hospital on 13.12.2002.
Held: The instructions of the Insurance Corporation prescribing minimum waiting period for various diseases during which life policies are not issued were called for. For stone in kidney, the minimum waiting period is 12 months after cure or six months after operation. When the policies were obtained by the LA, both these periods had expired. As has been said that no record of subsequent period has been produced and therefore we can presume that the patient must have been cured fully.
The next question for consideration is whether this was a material fact which was required of the insured to have disclosed in the proposal forms. In Satwant Kaur Sandhu vs New India Assurance Co. Ltd. 2009 (IV) CPJ 8, Hon'ble the Supreme Court has held that the term material fact is not defined in the Act and therefore it has been understood in general terms to mean as any fact which would influence the judgement of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. In this judgement, Regulation 2(1)(d) of the Insurance Regulatory & Development Authority (Protection of Policy Holders Interest) Regulation, 2002 has been referred which defines the word material to mean and include all important, essential and relevant information in the context of guiding the insurer to decide whether to undertake the risk or not. In this particular case, the insured had been treated for renal stone and was discharged from the hospital on 13.12.2002. The policies were obtained in the year 2006 and 2007. Long period had passed after insured was cured. Withholding of such information will not deprive the Complainant from receiving the payment of insured amount.
Appellant also argued that this was a case where the LA died because of heart attack. Record of hospital goes to show that he was treated for heart ailment also. It was recorded in 2002 that he was a known case of IHD (Ischemic Heart Disease). In this regard, opinion of the Cardiologist was also obtained. Such argument cannot be entertained at the appellate stage as this plea was not taken while repudiating the claim of the Complainant nor was taken while submitting reply before the learned District Forum. A new case cannot be allowed to be introduced at the appellate stage simply on the basis of verbal submission. Repudiation was rightly set aside. Appeal dismissed.
- LIC of India & Anr. vs Smt. Tijo Bai, Appeal No.
219 of 2010, decided by Hon'ble Rajasthan State Consumer Disputes Redressal Commission, Jodhpur on March 07, 2011:Fact: The claim was repudiated on the ground that the Life Assured (LA) before submitting proposal form had been suffering from HIV positive and Tuberculosis (TB) for which he had taken treatment but he did not disclose these material facts in the proposal form and thus suppressed the important information. The Appellant has relied upon certificate of Doctor and the certificate issued by the Hospital wherein the LA Lala Ram was shown to have been suffering from HIV positive.
Held: How long the LA had been suffering from this disease, for that no record was produced. It was simply mentioned in the certificate that he had been suffering from the disease approximately for the last 6-7 months. As no record has been produced, therefore, it is difficult to rely upon such a statement made in the certificate. It has also been mentioned in the certificate that the LA was on anti-TB treatment but for that also no record worth the name has been produced. In absence of treatment record, such kind of certificates cannot be relied upon specially in absence of affidavit of the concerned Doctor. The Bed Head Ticket (BHT) of Mathura Das Mathur Hospital, Jodhpur has been produced but it relates to the period subsequent to the date of policy. This BHT also does not indicate the period from which the LA had been suffering from HIV positive. There has been no satisfactory evidence on record to show that the LA had been suffering from any kind of disease at the time of taking the policy. Repudiation was rightly set aside. Appeal dismissed.
- Life Insurance Corporation of India Ltd. Vs. Urmila Rawat, First Appeal No.
262 of 2008, decided by Hon'ble Uttarakhand State Consumer Disputes Redressal Commission, Dehradun on April 20, 2011:Fact: LA met with a fatal road accident and died the next day. An FIR was also lodged in this regard. Claim was repudiated by the insurance company on the ground that LA was suffering from Hepatitis, Typhoid and Dysentery from before taking the policies, in connection of which, he had consulted a medical practitioner and the insured also remained on leave from his office for 30 days in the year 2003 and 157 days in the year 2004. This fact was suppressed by him at the time of filling the proposal form and did not disclose this fact in the proposal form and gave false answers.
Held: LA did not die on account of any ailment, but his death was caused on account of the injuries sustained by him in a motor accident. Appellant could not show any authority in which the death of the insured was caused on account of the injuries sustained in the accident, but the claim was repudiated on account of concealment of any ailment by the insured. Here in the instant case, the fact with regard to the concealment of ailment does not have any nexus with the factum of the accident, in which the insured – deceased died. Repudiation was rightly set aside. Appeal dismissed.
- Life Insurance Corporation of India Vs. Smt. Balvinder Kaur, First Appeal No.
134 of 2005, decided by Hon'ble Uttarakhand State Consumer Disputes Redressal Commission, Dehradun on March 28, 2011:Fact: LA was insured with LIC against a policy with accidental benefit. He died in an accident on 11.05.2002 while driving a tractor. The LIC paid to the complainant the insured amount of Rs. 50,000/-, but in respect of the accidental claim of an equal amount of Rs. 50,000/-, her claim was repudiated on the ground that the insured was driving the tractor without holding a driving licence.
Held: The policy condition No. 10(2)(b), which stipulates that the LIC shall not be liable to pay the additional sum if the death of the life assured was caused by intentional self injury or whilst the life assured was under the influence of intoxicating liquor, drug or narcotic and also if the life assured's death was a result of committing any breach of law. A life insurance policy is a contract between the LIC and the insured and, therefore, the terms and conditions of the policy must be strictly construed with while deciding a claim. In the present case, the insured was driving the tractor without holding a driving licence for that purpose. He was entitled to drive a motorcycle only, with or without gear and no other vehicle. Therefore, this act of the insured was certainly a violation of the provisions of the Motor Vehicles Act, 1988. Further, the police report states that he was under influence of liquor. The way the accident took place, clearly shows that the person driving the tractor was unable to drive it properly and the vehicle was not under his control. Such an act amounts to causing death by intentional self injury and also due to the influence of intoxicating liquor. The police report was prepared after completing the postmortem and, therefore, it is an evidence in respect of the deceased being under the influence of liquor at the relevant time. Thus, we are of the view that the insurance company has rightly repudiated the accidental claim for the additional sum and the District Forum has failed in appreciating this legal aspect of the case. Therefore, the order passed by the District Forum is liable to be set aside. Repudiation upheld. Appeal allowed.
- Life Insurance Corporation of India Vs. Anuben Jethabhai Patel & Ors., Appeal No.
1149 of 2007, decided by Hon'ble Gujarat State Consumer Disputes Redressal Commission, Ahmedabad on March 29, 2011:Fact: LA gave a health declaration for revival of policy on 3/3/99. On 1/4/99, LA had consulted an ENT surgeon and had taken treatment for two days. On 7/4/99, by Histology Report, he came to know that he was suffering from tongue cancer. Policy was revived on 16/4/99. LA died on 25/3/01.
Held: Insurance Company failed to prove that the LA died due to cancer nor could it prove that LA had taken any treatment for cancer. If the Insurance Company had any doubt, they should have got the LA examined by their panel doctor before revival of Policy. LA was not aware of the disease when he made declaration for revival. Repudiation was rightly set aside. Appeal dismissed.
- Branch Manager, Life Insurance Corporation of India Vs. Smt.Rukhmanibai Dadarao Autade & Ors., First Appeal No.
1948 of 2006, decided by Hon'ble Maharashtra State Consumer Disputes Redressal Commission, Aurangabad bench on March 04, 2011:Fact: LA had obtained policy wherein premium was payable half yearly. He allegedly had paid premium on 16.09.2004 to his agent for depositing the same with the appellant. LA died in the accident on 11.2.2005. Claim was repudiated on the ground that premium for September 2004 was not deposited and thus policy was in lapsed condition at the time of death of policy holder. Complaint was filed before District Forum. LIC was served with the notice but did not file written version. Agent denied having received the premium.
Held: Agents are not authorised to collect premium. Thus payment of premium to the agent cannot be considered as deposit of premium with insurance company. There is also no evidence to show that policy holder had paid premium amount to the agent. Though respondent No.4 is authorised agent, he is not authorised to collect the premium from policy holders. Reliance placed on LIC vs. Mani Ram, reported in Legal Digest of LIC January 2006 page 5. Order of District Forum set aside. Repudiation upheld. Appeal allowed.
