CASE ANALYSIS

Life Insurance Corporation Of India, Rajasthan vs Jyotsana Rawal

(2018 Indlaw NCDRC 535)

I OBJECTIVE :-

The Court said that “ in the matters of insurance the principle of Uberrima Fides is most
essential element”. And also if the other party has measurablly failed to prove their burden on
them, then they will be liable for the compensation to the complainants.

II PLEA OF THE PARTIES:-

a) Plea of Appellant:- Appellant plea for the court not to grant the compensation to the
respondent (Complainant).
b) Plea of Respondent:- Respondent (Complainant) plea for the court to grant the
compensation for the Life Insurance of her deceased husband from the appellant
(LIC) along with the cost.

III FACTS OF THE CASE:-

 Here Anil Kumar Rawal, since deceased, husband of the complainant, took life
insurance policy for sum of Rs. 1 lakh under Salary Saving Plan from the LIC of
India/OP.
 He was working in various departments and the premium of Rs.408/- was being
deducted from his salary every month.
 During the subsistence of the insurance policy, Anil Kumar Rawal, died due to heart
attack on 19.09.2006.
 As a nominee in the said policy, the complainant, Jyotsana Ralal, wife of deceased,
submitted a death claim before the OP but the claim was rejected by the OP after
inordinate delay on 2.11.2007 with the reason that her husband had given wrong
information regarding his health in the proposal form.
 It was stated that he was suffering with Tuberculosis (TB) for the last two years prior
to take the policy.
  Therefore, the complainant had filed a complaint before the District Forum, Jaipur-III
for the alleged deficiency in service from OP and prayed for insured amount of Rs. 1
lakh alongwith compensation.
 The OP resisted the complaint by filing written version. It is submitted that the
deceased life assured filled the proposal form with a wrong facts and he has not
disclosed that he was suffering from TB two years prior to filling up of the proposal
form.
 The deceased had taken departmental leaves for his illness. He took treatment in
Savai Mansingh Hospital, Jaipur on 20.5.2003 and thereafter, he was referred to TB
hospital alongwith investigations and the treatment sheets. Therefore, the repudiation
of claim is justifiable.
 On the basis of pleadings and evidence from both the parties, the District Forum
allowed the complaint and directed the OP to pay R.s 1 lakh alongwith 18% interest
per annum. It also awarded Rs.21,000/- for mental agony and cost.
 Being aggrieved, the OP/LIC filed first appeal before the State Commission,
Rajasthan. The State Commission dismissed the appeal by stating that the husband of
complainant had expired due to heart attack, who had no concern with TB disease.
Being aggrieved by the impugned order, LIC filed this revision petition.

IV ISSUSES:-

1. Whether the LIC has proved that the policy holder has misrepresented the policy or
not?
2. Whether the parties followed the Uberrima Fides or Principle of utmost good faith or
not?

V ARGUMENTS:-

Learned counsel for the petitioner submitted that the deceased insured had filled the
proposal form on 11.3.2005. He had intentionally submitted wrong answers in
columns No. 11 and 14 of the proposal form. The statements made by the insured
were false, therefore, the insurance contract became null and void. The amount of
premium paid was confiscated. The OP investigated the death claim and came to
know that the deceased had taken several leaves during the period from 13.5.2003 to
24.12.2005 from his employment.
In the medical certificate, it is clearly mentioned that the deceased had taken to Sawai
Man Singh Hospital on 20.05.2003 where he visited the OPD and his treatment slip
 clearly mentioned that he was referred to TB hospital alonwith X-rays, which proves
that the deceased was suffering from chronic asthma with general debility from two
years before filling the insurance proposal form. At the time of death, deceased
suffered asthematic attack and died at Satellite Hospital, Jaipur on 19.9.2006.
I have perused the entire evidence and the medical record on the file. The OPD slip
of Sawai Mansingh Hospital revealed that the patient approached the hospital on
20.05.2003 and his blood investigations alongwith ECG and X-ray of chest were
performed and thereafter he was referred to TB hospital for needful. The doctors
treated the patient with higher antibiotics and Neurobion tablets. I have perused the
leave certificate on record. The certificate of employer reveals that the deceased took
leaves for several periods viz. 3.12.2000 to 08.01.2001, 10.12.2001 to 04.01.2002,
13.5.2003 to 31.5.2003, 20.04.2005 to 30.04.2005, 14.07.2005 to 23.07.2005,
15.10.2005 to 22.10.2005, 26.11.2005 to 24.12.2005, 8.3.2006 to 10.03.2006,
23.05.2006 to 19.06.2006, 14.08.2006 to 13.06.2006 and 13.09.2006 to 19.09.2006.

VI INTERPRETATION:-

It is pertinent to note that none of the prescriptions on record show that the patient
was treated for tuberculosis or any Anti cox medication were prescribed. On
19.9.2006 at 5.00 p.m., the deceased was admitted in Satellite Hospital with the
complaints of Asthama (Asthmatic Chronic with general debility). He suffered severe
Dyspnea and died due to heart attack. The cause of death given by the doctor was as
heart attack. Thus, in my view, OP just relied upon the OPD slip, which has
mentioned about refer to TB Hospital. Only mere referral slip is not a evidence to
prove that the person was suffering from TB. The OP failed to prove that the deceased
was suffering from tuberculosis.

VII RELEVANT CASE LAW:-

Sulbha Prakash Motegaonkar & Ors. Vs. Life Insurance Corporation of India,
decided on 05-10-2015. This was the case where the deceased died due to Ischemic
Heart disease and myocardial infarction. There was a concealment of lumbar
spondylitis with PID with sciatica and, therefore, the insurance company repudiated
 the claim. Hon'ble Supreme Court held that it was not the case of insurance company
that the deceased was suffering from life threatening disease which could or did cause
death of the insured. The Court observed as below:
"We are of the opinion that the National Commission was in error in denying to the
appellants the insurance claim and accepting the repudiation of the claim by the
respondent. The death of the insured due to ischemic 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."

VIII JUDGMENT:-

On the basis of foregoing discussion, the OP/LIC failed to prove that the deceased
was suffering from tuberculosis prior to taking the policy. Moreover, on medical
ground, in my view, there is no direct co-relation between Tuberculosis and Heart
Attack. I do not find any need to interfere in the well-reasoned order of both the fora.
The revision petition is dismissed.