While upholding an order passed by the state commission, the national consumer disputes redressal commission (NCDRC) dismissed an appeal filed by Life Insurance Corp of India (LIC) and asked the insurer to pay Rs47.90 lakh to nominees of the deceased life assured (DLA).
In an order, the NCDRC bench of Dr Inder Jit Singh (presiding member) says, "...(the) state commission has correctly placed reliance on the judgement of the 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 the insurance company is not correct."
Kheda (Gujarat)-based Anil Kumar Patel bought nine life insurance policies from LIC. However, within two years of purchasing the insurance policies, Mr Patel died of a heart attack. When his nominees filed an insurance claim for all the life insurance policies he bought, LIC rejected the claims, stating that at the time of taking the policies, Mr Patel had not disclosed the material facts.
The Patel family then approached the Kheda district consumer disputes redressal forum, which partly allowed their complaints. LIC challenged the order before the Gujarat state consumer disputes redressal commission, which was dismissed.
During the hearing before the state commission, Mr Patel's nominees contended that a medical certificate regarding the ailment of depression could not be looked into as evidence as it was not supported by the affidavit of the doctor who issued the certificate.
However, the state commission, while relying on the judgement of the Supreme Court in Satwant Kaur Sandhu vs The New India Assurance Co Ltd and keeping in view the authorisation of Mr Patel in the proposal form to LIC to get information from any hospital regarding health, observed that no affidavit of the doctor is required in support of the certificate.
While admitting the doctor's certificate for the ailment of depression, the state commission held that there was suppression about the ailment of Mr Patel when policies were taken. It further observed that, from the medical literature for depressive disorder produced by LIC, one cannot conclude that depression is a serious ailment and there is nothing on record that may show that depression may lead to heart failure. "There is no nexus between the ailment and the cause of death, i.e. heart failure."
While upholding the order of the district consumer forum and dismissing seven appeals filed by LIC, the 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."
In its order on 25 January 2019, the state commission directed LIC to pay Rs24 lakh with an interest of 7.5%pa (per annum) in complaint no.46 of 2012 and Rs5,000 towards mental harassment and agony and costs. In complaint no.47 of 2012, the commission asked LIC to pay Rs23.90 lakh with 7.5% interest and Rs5,000 as costs to the nominees of Mr Patel.
LIC challenged the state commission order before NCDRC. During the hearing, LIC argued that Mr Patel had concealed the material facts regarding his past medical history and treatment.
The counsel for Mr Patel's nominees contended that the panel doctors of LIC had conducted the medical tests of the deceased before the issuance of the said policies and an extra premium was also charged due to the excess weight of the deceased and, therefore, there was no suppression of any information by the DLA. "Even 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 (Mr Patel)."
The counsel further stated that one of the clients of Mr Patel had lodged a complaint against him, and he was arrested and physically beaten up while in police custody. "...on the pretext of sunstroke, he was brought to Apollo Hospital and died on 24 May 2010 and the post-mortem report showed the cause of death to be a cardiorespiratory arrest."
"Even, the medical documents of DLA 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. The injury certificate dated 1 June 2010 has been prepared after almost one week of the death of Mr Patel and the same not been proved by affidavit and there is also no name of the doctor who has authored it or signed it. Mr Patel was never taken to the civil hospital for any examination as claimed by LIC that he was examined by the civil hospital and that it was recorded therein regarding the deceased's pre-existing condition," the counsel added.
After hearing both sides, Dr Singh from NCDRC observed that the main reason for repudiation of claim is Mr Patel suppressed the material facts of his ailment that was depression.
"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 and the state commission and rival contentions of the parties. We find no illegality or material irregularity or jurisdictional error in the orders of the state commission; hence the same is upheld," NCDRC says.
(Revision Petition Nos1096, 1097, 1098, 1099, 1100, 1101, 1102 of 2019 & First Appeal Nos921, 922 of 2019 Date: 20 September 2023)
