Case Law Details

Case Name : Life Insurance Corporation of India Vs Dr. Nilam Hetalkumar Patel & 4 Ors. (NCDRC Delhi)
Appeal Number : Revision Petition No. 1096 of 2019
Date of Judgement/Order : 20/09/2023
Related Assessment Year :
Courts : NCDRC/SCDRC

Life Insurance Corporation of India Vs Dr. Nilam Hetalkumar Patel & 4 Ors. (NCDRC Delhi)

Repudiation of Insurance claim not maintainable as no connection was established between depression and cardiovascular arrest resulting into death

Conclusion: In present facts of the case, the National Commission dismissed the Revision Petition filed by the Insurance Company and have upheld the Order of State Commission wherein it was held that the deceased insured before taking the policies was suffering from major depression but he died due to cardiovascular arrest and therefore, the repudiation of the claim made by the Insurance Policy was not legal and valid as there was no nexus between the disease and the cause of death.

Facts: In present facts of the case, the Revision Petition have been filed by the Petitioner – LIC against Respondents under section 21 (b) of Consumer Protection Act 1986, against the order dated 25.01.2019 of the State Consumer Disputes Redressal Commission Gujarat. The Complainants have also filed separate Consumer Complaint before the State Commission due to the pecuniary jurisdiction.

Brief facts of the case are that husband of complainant no.1 who is also father of Complainant nos. 2 and 3 and son of Complainant nos. 4 and 5 had taken nine different Life Insurance Policies from the Opposite Party (OP). The husband of Complainant no.1, however, died within two years of taking the insurance policies due to heart attack. The claim was filed before the OP by the Complainants. The OP repudiated the claim on the ground that deceased at the time of taking the policies, had not disclosed the material facts. Being aggrieved of the repudiation of the claim, the complainants filed complaint before the District Forum, which partly allowed the complaints. Being aggrieved by the decision of the District Forum, OP filed Appeals before the State Commission which were dismissed. Hence the OP is before this Commission in the present RPs.

The Complainant submitted that panel doctors of the OP had conducted the medical tests of the deceased prior to the issuance of the said policies and extra premium was also charged due to excess weight of the deceased and, therefore, there was no suppression of any information by the life assured. Even the OP has not proved any fact that suppression of material information or concealment of pre-existing disease had a nexus with the cause of death of life assured. Further, it was submitted that one of the client of the life assured had lodged a false complaint against him and cognizance was taken of the same. Thereafter, the life assured was arrested and physically beaten up while in police custody and on the pretext of sun stroke, he was brought to Apollo Hospital and he died on 24.05.2010 and the post mortem report showed the cause of death to be cardio respiratory arrest.

The National Commission have taken into consideration the order of State Commission wherein it was held that “……… if there is no nexus between the disease and the cause of death then the repudiation of the claim has been made by the Insurance company is not legal and valid. In the instant case, the deceased insured before taking the policies was suffering from major depression but he died due to cardiovascular arrest and therefore, the repudiation of the claim made by the LIC was not legal and valid” and upheld the order of the District Forum and dismissed seven appeals and also allowed the two Consumer Complaints.

On basis of the above, it was held that that State Commission has correctly placed reliance on the judgment of Hon’ble Supreme Court in Sulbha Prakash Motogaonkar that as there was no nexus between the disease, information about which was not disclosed and the cause of death, hence the repudiation of the claim by OP Insurance Company was not correct.

Accordingly, the Revision Petitions were dismissed.

FULL TEXT OF THE JUDGMENT/ORDER OF NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

1. The Revision Petitions (RP) No. 1096 to 1102 of 2019 have been filed by the Petitioner – LIC against Respondents as detailed above, under section 21 (b) of Consumer Protection Act 1986, against the order dated 25.01.2019 of the State Consumer Disputes Redressal Commission Gujarat (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No. 3402 to 3408 of 2012 in which order dated 20.08.2012 of Kheda District Consumer Disputes Redressal Forum (hereinafter referred to as District Forum) in Consumer Complaint (CC) nos. 73 to 79 of 2013 was challenged, inter alia praying for setting aside the orders of the State Commission and District Forum dated 25.01.2019 and 20.08.2012. While the Revision Petitioner ( hereinafter referred to as OP) was Appellant and the Respondents ( hereinafter referred to as Complainants) were Respondents in FA Nos. 3402 to 3408 of 2012 before the State Commission, the Revision Petitioner was Opposite Party and Respondents were Complainants before the District Forum in CC No. 73 to 79 of 2012.

2. The Complainants have also filed separate Consumer Complaint No. 46 and 47 of 2012 before the State Commission due to the pecuniary jurisdiction. The First Appeals No. 921 and 922 of 2019 have been filed under Section 19 of the Consumer Protection Act, 1986, against the order dated 25.01.2019 of State Commission in CC No. 46 and 47 of 2012 interalia praying for setting aside the Order dated 25.01.2019 of the State Commission. The Appellant was Respondent and the Respondents were Complainants before the State Commission.

3. As the above aforesaid Revision Petitions and Appeals have been filed against the common order dated 25.01.2019 of the State Commission, parties involved are the same, and issues for consideration/determination are related, these are being taken up together under this order. However, for the sake of convenience, Revision Petition (RP) No. 1096 of 2019 is treated as the lead case and facts enumerated herein under are taken from RP No. 1096 of 2019.

4. Notice was issued to the Respondents in the Revision Petitions and First Appeals on 29.05.2019. Parties filed Written Arguments/Synopsis on 03.08.2023 and 02.08.2023 respectively.

5. Brief facts of the case are that husband of complainant no.1 ( Anil Kumar Patel), who is also father of Complainant nos. 2 and 3 ( being minor)and son of Complainant nso.4 and 5 had taken nine different Life Insurance Policies from the Opposite Party ( OP). The husband of Complainant no.1, however, died within two years of taking the insurance policies due to heart attack. The claim was filed before the OP by the Complainants. The OP repudiated the claim on the ground that deceased at the time of taking the policies, had not disclosed the material facts. Being aggrieved of the repudiation of the claim, the complainants filed complaint nos. 73 to 79 of 2012 before the District Forum, which partly allowed the complaints. Being aggrieved by the decision of the District Forum, OP – LIC filed Appeals before the State Commission which were dismissed. Hence the OP is before this Commission in the present RPs.

6. The Complainants also filed CC Nos. 46 of 2012 and 47 of 2012 before the State Commission due to the pecuniary jurisdiction. The State Commission allowed both the appeals filed by the complainants. Being aggrieved of the said order dated 25.01.2019, the OP-LIC is before this Commission by way of FA No. 921 of 2019 and 922 of 2019.

7. OP-LIC has challenged the order dated 28.01.2019 of the State Commission mainly on the following grounds :

(a) Complainants are estopped from filing the complaint by their own acts, conduct, admission, omission, acquiescence and latches.

(b) OP has acted in terms of policy approved by IRDA and that the life insurance policies are the contracts governed by the terms and conditions incorporated in the policy document as also the provisions of the Insurance Act.

(c) The claim had been repudiated on the sound ground of suppression of material facts and that contract of insurance is based on utmost good faith and assured is under a mandate to make true and correct disclosures and relied upon the following judgment of the Hon’ble Supreme Court / National Commission:

(a) Mithoo Lal Nayak Vs. LIC, AIR 1962 SC 814.

(b) Life Insurance Corporation of India Vs. Asha Goel (2001) 2 SCC 16

(c) C. Chacko and Anr. Vs. Chairman, LIC of India and Anr. 2008 ( 1) SCC 321

(d) Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. (2009) 8 SCC 316.

(e) Life Insurance Corporation of India Vs. Manish Gupta, Civil Appeal No. 3944 of 2019.

(f) Life Insurance Corporation of India Vs. Neelam Sharma (Manu/CF/0627/2014)

(g) Life Insurance Corporation of India through Assistant Secretary (Legal) Vs. Archna Dayanand Vakade ( Manu/CF/0038/2014)

(d) The Fora below have erred in ignoring the fact that had the insured disclosed about his illness, the OP might have called for certain special tests which might have effected under writing decision in assessing the risk.

(e) The Fora below have erred in holding that suppression of facts has no nexus with the cause of death and referred to various judgments of this Commission i.e. Life Insurance Corporation of India Vs. Krishan Chander Sharma ( Manu/CF/0450/2006), Life Insurance Corporation of India Vs. Smt. Kusum Patro ( Manu/CF/0055/2012).

(f) The orders cited by the Respondents are not even the judgments.

8. Heard counsels of both sides. Contentions/pleas of the parties, on various issues raised in the RPs / FAs, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

8.1. Counsel for the OP-LIC apart from repeating the points which are stated in para 7, grounds for challenging the order of the State Commission, argued that deceased life assured had concealed the material facts in respect of his past history, treatment.

8.2. Counsel for the Respondents / Complainants argued that panel doctors of the OP- LIC had conducted the medical tests of the deceased prior to the issuance of the said policies and extra premium was also charged due to excess weight of the deceased and, therefore, there was no suppression of any information by the life assured. The repudiation of the claim is even otherwise without reference to the record of the case and the insurance company has not led any evidence to prove the veracity and integrity of the documents produced by it or relied by it. Even the OP-LIC has not proved any fact that suppression of material information or concealment of pre-existing disease had a nexus with the cause of death of life assured.

8.3. Counsel for Respondents further argued that one of the client of the life assured had lodged a false complaint against him and conginizance was taken of the same. Thereafter, the life assured was arrested and physically beaten up while in police custody and on the pretext of sun stroke, he was brought to Apollo Hospital and he died on 24.05.2010 and the post mortem report showed the cause of death to be cardio respiratory arrest.

8.4. It is argued that the documents pertaining to arrest of life assured and showing that the death occurred while in police custody have been suppressed by the LIC and that deceased had also obtained life insurance cover from HDFC Life Insurance and said insurance company has allowed the claim of the complainants.

8.5. Even, the medical documents of Deceased Life Assured such as Injury Certificate and Medical Prescriptions have not been proved by the LIC by any evidence and are false on the face of it. Counsel further argued that injury certificate dated 01.06.2010 has been prepared after almost one week of the death of the life assured and the same not been proved by affidavit and there is also no name of the doctor who has authored it or signed it. The deceased was never taken to Civil Hospital for any examination as claimed by the OP-LIC that deceased was examined by the Civil Hospital and that it was recorded therein regarding deceased’s pre existing condition.

8.6. Counsel for the Respondent has relied on the following judgments of Hon’ble Supreme Court / National Commission:

(a) Sulbha Prakash Motegaonkar and Ors. Vs. LIC of India – Civil Appeal No. 8245 of 2015 decided on 05.10.2015.

(b) LIC of India Vs. Jyotsana Rawal – RP NO. 864 OF 2018, decided on 08.05.2018

( c) Neelam Chopra Vs. LIC of India & Ors. – RP No. 4461 of 2012 decided on 08.10.2018

(d)   Pratibha Bevinal Vs. MetLife India Insurance Co. Ltd. – CC No. 88 of 2011 decided on 07.10.2022

( e ) Lachman Sarup Vs. LIC of India – RP No. 42 of 2013 decided on 04.02.2019

(f) Vankat Naidu Vs. LIC of India & Anr. – IV ( 2011) CPJ 6 ( SC) decided on 26.08.2011

(g) Life Insurance Corporation of India Vs. Smt. G.M.Channabasamma – (1991) 1 SCC 357 decided on 06.12.1990

(h) LIC of India & Ors. Vs. Asha Goel & Anr. III ( 2012) CPJ 5 (SC) decided on 13.12.2000

(i) LIC of India Vs. Chandra Kanta Lohande – RP No. 3138 of 2003 decided on 26.03.2008

(j) LIC of India & Anr. Vs. Ashok Manocha – III ( 2011) CPJ 418 ( NC) decided on 25.05.2011

(k) LIC of India &Anr. Vs. Sudesh – II ( 2012) CPJ 65 ( NC) decided on 27.02.2012

(l) Nakul (Minor) & Anr. Vs. LIC of India & Anr. – II ( 2012) CPJ 68 ( NC) decided on11.01.2012

(m) LIC of India Vs. Charanjit Kaur – IV ( 2011) CPJ 373 ( NC) decided on 14.10.2021

( n) PNB MetLife Ins. Co. Ltd. Vs. Vinita Devi – FA No. 1045 of 2017 decided on 24.09.2018

(o) Sushil Kumar Jain Vs. United India Ins. Co. Ltd. – 2011 SCC Online NCDRC 811 decided on 04.11.2011

 (p) Bajaj Allianz General Insurance Co. Ltd. Vs. Usha P Joshi & Ors.-FA No. 48 of 2012 decided on 01.02.2019

9. The main reason for repudiation of claim is that deceased has suppressed the material facts of his ailment that was depression. The Complainants have contended before the State Commission that medical certificate regarding ailment of depression cannot be looked into as evidence as it was not supported by the affidavit of the doctor who issued the certificate. However, the State Commission, relying on the judgment of Hon’ble Supreme Court in Satwant Kaur Sandhu Vs. The New India Assurance Co. Ltd. (2009) 8 SCC 316 and keeping in view the authorisation of deceased in the proposal form to LIC to get information from any hospital regarding health, have observed that no affidavit of the doctor is required in support of the certificate. Hence, admitting the certificate of the doctor for the ailment of depression, the State Commission held that there was suppression about the ailment of the deceased when policies were taken. However, the State Commission was of the view that main question is whether there is any nexus between ailment and cause of death. State Commission further observed that from the medical literatures for depressive disorder produced by LIC, one cannot conclude that this is a serious ailment. Further, the State Commission observed that there is nothing on record which may show that ailment of depression may lead to heart failure. There is no nexus between the ailment and the cause of death i.e. heart failure. State Commission relied upon judgment of Abdul Latif and Others Vs. LIC of India III ( 2014) CPJ 357( NC) and Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others 2021 13 SCC 561 decided on 05.10.2015 in this regard. Hon’ble Supreme Court has observed in this case

“6…….. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified”.

10. State Commission also relied upon judgment in Venkat Naidu Vs. Life Insurance Corporation of India IV ( 2011) CPJ 6 ( SC), which was upheld by the Supreme Court. Other case law relied upon by the State Commission was case of LIC Vs. Jyotsna Rawal, RP No. 864 of 2008 decided by the National Commission, relying on the judgment of Hon’ble Supreme Court in Sulbha Prakash Matogaonkar and Ors. ( supra) and case of Neelam Chopra Vs. LIC and Ors in RP No. 4461 of 2012. After taking note of various judgments of this Commission and Hon’ble Supreme Court, the State Commission concluded that “ …….It is very clear that the husband of original complainant no.1 was suffering from major depression and he died due to heart attack. Thus, it cannot be said that there is any nexus between the ailment and the cause of death. Hence, the repudiation of the claim made by the LIC on the ground of non disclosure of material facts is not justified.” State Commission also duly considered various case laws cited by LIC in support of their contention that there was non-disclosure of material facts and even if there is no nexus with the disease and the cause of death of deceased, then also the LIC was entitled to repudiate the claim of the Complainant and observed as follows:

“All the above cited cases are decided by the Hon’ble National Commission in the year 2014-2015 in which it was held that if there is non disclosure of material facts then nexus between the disease and the cause of death is not material. This pronouncement is now no longer a good law as the contrary view has been taken by the Honorable Supreme Court of India in the case of Sulbha Prakash case ( supra ), which was followed by the Honorable National Commission in the latest judgment which was delivered in December 2018 in the case of Reliance Nippon Life Insurance Co. Ltd. Vs. Yellapu Venkata.”

11. Accordingly, State Commission held that “……… if there is no nexus between the disease and the cause of death then the repudiation of the claim has been made by the Insurance company is not legal and valid. In the instant case, the deceased insured before taking the policies was suffering from major depression but he died due to cardiovascular arrest and therefore, the repudiation of the claim made by the LIC was not legal and valid” and upheld the order of the District Forum and dismissed seven appeals and also allowed the two Consumer Complaints.

12. We have carefully gone through the facts and circumstances of the case, orders of the State Commission, other relevant records, case laws relied upon by the parties / State Commission and rival contentions of the parties and are of the view that State Commission has correctly placed reliance on the judgment of Hon’ble Supreme Court in Sulbha Prakash Motogaonkar ( supra ) that as there is no nexus between the disease, information about which was not disclosed and the cause of death, hence the repudiation of the claim by OP Insurance Company is not correct.

13. In view of the foregoing, we find no illegality or material irregularity or jurisdictional error in the orders(s) of the State Commission, hence the same is upheld. Accordingly, Revision Petitions No. 1096 to 1102 of 2019 and First Appeals No. 921 and 922 of 2019 are dismissed.

14. The pending IAs in the case(s), if any, also stand disposed off.

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