Sudip Ahluwalia, Member
1. This Revision Petition has been filed by Life Insurance Corporation of India (LIC) under Section 58(1)(b) against the impugned Order dated 09.05.2023 passed by the State Consumer Disputes Redressal Commission, Hyderabad in F.A. No. 73 of 2022, vide which the Appeal filed by the Petitioner was dismissed, and the Order of the District Forum was upheld.
2. The factual background, in brief is that Chandanala Padmavathi, daughter of the Complainant, took an Insurance Policy named “Jeevan Anand” under the “Non-Medical Special” category for a basic sum assured of Rs. 6,50,000/- with premium amount of Rs. 3,314/- per month, and its date of commencement was 05.05.2014. The Life Assured passed away due to Systemic Lupus Erythematosus on 26.02.2016 within a period of 1 year, 8 months and 14 days from the commencement of policy. The Petitioner repudiated the claim on the ground that the Deceased Life Assured (DLA) had made deliberate misstatements and withheld material regarding her health at the time of taking the Insurance. The Respondent being the mother and nominee of the DLA filed her Complaint before the District Forum, Ranga Reddy, alleging wrongful repudiation.
3. The District Forum vide its Order dated 10.11.2021 partly allowed the Complaint and directed the Petitioner to pay Rs. 6,50,000/- along with interest @6% p.a. from 20.09.2016 till date of realisation and Rs. 10,000/- towards compensation besides costs of Rs. 5,000/-. The Petitioner appealed before the State Commission which dismissed the Appeal vide the impugned Order dated 09.05.2023, and upheld the Order of the District Forum.
4. Ld. Counsel for the Petitioner has argued that as per the Discharge Summary of Bristlecone Hospital, wherein the DLA was admitted on 30.08.2010, and discharged on 02.09.2010; the DLA was diagnosed with Lupus Nephritis and had undergone kidney biopsy which was prior to the issuance of the Policy. Therefore the DLA had withheld material information regarding her health at the time of proposing for Insurance by giving false answers to the specific questions at Sr. No. 11(b), (d), (e) and (j) posed in the Proposal Form and placed reliance on the cases of “LIC v. Manish Gupta, (2019) (4) ABR 640” and “Pankaj Parashar v. ICICI Prudential Life Insurance Co. Ltd., 2017 (2) CPR 23”.
5. Ld. Counsel for Respondent has argued that usually in health insurance Policies, the Insurers issue the Policies only after medical examination whereas in this case, they issued the Policy without any such examination which therefore amounts to an unfair trade practice; That the Policy was issued after a gap of 4 years of the said diagnosis at the Bristlecone Hospital and there was no evidence to show that the DLA was still suffering from the disease at the time of signing the Proposal Form. Ld. Counsel for Respondent had placed reliance on the cases of “Tarlok Chand Khanna v. United India Insurance Co. Ltd., 1 (2012) CPJ 84 (NC)” and “Bajaj Allianz Life Insurance Co. Ltd. & Ors. v. Kanduru Gangadhara Rao, RP 1054 of 2020”.
This Commission has heard both the Ld. Counsel for the Petitioners and the Respondent, and perused the material available on record.
7. Perusal of the Proposal Form filled up by the deceased for the purpose of obtaining the Insurance goes to show that she had replied “No” to the specific question No. 11 (d) concerning her personal history as to whether she was or had ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system.
8. Again, from the Death Summary of the Insured issued by the Department of IM & Pulmonary/Critical Care 1 of Care Hospitals, it is seen that in her final diagnosis; background had been noted as follows-
“BACKGROUND:
MCTD/SLE
LUPUS NEPHRITIS GRADE IV {RENAL BIOPSY 2010}
HYPOTHYROIDISM
MODERATE PAH”
However, the Medical Attendant’s Certificate on record goes to show that the primary cause of death of the insured was “LUPUS NEPHRITIS, THROMBOCYTOPENIA, SEPSIS” and that in relation to previous diseases or illnesses covered under Col. 6 of the said Certificate, it was noted as “MLTD, ISLE LUPUS NEPHRITIS”.
9. Similarly, in the Certificate of Hospital Treatment collected by the Insurance Company, in relation to Question No. 7 which was to enquire about any other disease or illness which preceded or co-existed with the ailment at the time of the patient’s admission into the Hospital, it was noted as “MCTD/SLE, LUPUS NEPHRITIS IV, HYPOTHROIDISM, MODPAH”. All such material on record would clearly go to show that the deceased Insured had been suffering from Lupus Nephritis which is a kidney related ailment, for which she had undergone even a renal biopsy as far back as in the year 2010, and, at the time of her admission in Hospital, which was followed by her death, had already been suffering from the disease of Lupus Nephritis which had reached Stage IV by that time. Consequently, it was a clear case of suppression of material information and giving false answer to the Question 11 (d) in her Proposal Form which had sought to know about her ailments at any time for various organs of the body including specifically “kidney”.
10. The Ld. State Commission in its impugned Order, however, did not rely upon the Discharge Summary led into evidence on the ground that there was no Affidavit of the concerned Doctor or any Competent Authority of the said Hospital to depose about the authenticity of the medical treatment described in the said document (Exhibit B-6). In this regard, Ld. Counsel for the Petitioner has drawn attention to Annexure-P4, which happens to be the own letter to the Insurance Company under which she had submitted various documents as required by the Company to consider her Insurance Claim following death of the Insured. Attention in this regard has been specifically drawn to Encl. No. 8, which happens to be none other than “Death Summary Report” of Care Hospitals, Banjara Hills”.
11. In this view of the matter, when the Ld. State Commission had ignored that the document being the “Death Summary Report” of the Deceased Life Assured had emanated from the side of Complainant herself, there was no justification for not relying upon the same, and instead penalizing the Insurance Company for not leading any Affidavit or deposition in support of the same.
12. To sum up therefore, there remains no doubt that the Deceased Life Assured had suppressed material information about her medical condition, and especially about her kidney related disease “Lupus Nephritis”, on account of which the insurance company was justified in repudiating the insurance claim for this very reason. The matter is squarely covered by the decisions of the Hon’ble Supreme Court in this regard. In Civil Appeal No.3944 of 2019 “Life Insurance Corporation of India Vs.Manish Gupta (2019 (4) ABR640)”, the Hon’ble Apex Court had set aside the decisions of the Consumer Fora for the same reasons, which are reproduced as below:-
“12. The Discharge Card of the Department of Cardiovascular and Thoracic Surgery at Fortis Hospital specifically contains a resume of the history of the patient and reads thus:
Resume of History
H/O PRESENTING COMPLAINTS; PATIENT PRESENTED WITH ONE EPISODE OF COUGH ASSOCIATED WITH FEVER 1 MONTH BACK AFTER WHICH HE STARTED TO HAVE PAIN IN HIS JOINTS (ANKLE AND KNEES) ASSOC WITH MUSCLE SPASMS. PATIENT ALSO HAD SYNCOPAL EPISODES SINCE LAST SIX MONTHS.
Past History: K/C/O RHEUMATIC HEART DISEASE SINCE CHILDHOOD
(Emphasis Supplied)
13. The past history has been adverted to as a “known case of rheumatic heart disease since childhood”. Apart from the fact that this information would be recorded on the basis of information divulged by the patient, this aspect of the recording of the past history by Fortis Hospital was never in dispute. The treatment record indicates that the Respondent was operated for MVR. The nature of the diagnosis has been reflected as rheumatic heart disease. The Hospital treatment form is along the same lines.
14. A contract of insurance involves utmost good faith. In Satwant Kaur Sandhu V. New India Assurance Company Ltd. MANU/SC/1164/2009; (2009) 8 SCC 316, this Court has held thus:
……Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are knows to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge if of no moment.
15. The Consumer Fora have made a fundamental error in allowing the claim for reimbursement of medical expenses in the face of uncontroverted material on Record. The documentary material indicates that there was a clear failure on the part of the Respondent to disclose that he had suffered from rheumatic heard disease since childhood. The ground for repudiation was in terms of the exclusions contained in the policy. The failure of the Insured to disclose the past history of cardiovascular disease was a valid ground for repudiation.”
13. For the aforesaid reasons, this Commission is also of the opinion that both the Ld. Fora had acted erroneously and with material irregularity by awarding partial or full Insurance Claim to the Complainant in a case where the Deceased Life Assured had visibly and consciously suppressed about her medical condition, especially pertaining to her kidney disease which was known to her since as far back as the year 2010. The Revision Petition is therefore allowed after setting aside the impugned Orders passed by both the Ld. Fora below, and the Complaint filed by the Respondent accordingly stands dismissed.
14. Parties to bear their own costs.
15. Pending application(s), if any, also stand disposed off as having been rendered infructuous.
