LIC OF INDIA Vs. DALBIR KAUR

JUDGEMENT

(1.) The present revision petition has been filed by the Life Insurance Corporation of India (hereinafter referred as the 'Petitioner') against the order of the State Consumer Disputes Redressal Commission, Punjab (hereinafter referred as the 'State Commission') which has decided in favour of one Smt. Dalbir Kaur (hereinafter referred to as the 'Respondent') who was the original complainant before the District Forum.

(2.) The Petitioner's contention is that since this was an early death claim, it was investigated and found that the life assured prior to taking the policy had been admitted in the Sony Nursing Home w.e.f. 8.5.1999 to 16.5.1999 for treatment of gastroentitis. He was again admitted in same Nursing Home from 1.2.2002 to 28.2.2002 for treatment of Typhoid, Jaundice and Disc problem. He remained on leave from his place of work for over two months. He continued to be under treatment as an outpatient in the same Nursing Home till 22.4.2002 i.e. just before taking the policy on 31.5.2002. On 17.11.2002 he was again admitted in the hospital where he ultimately died on 29.11.2002 of septicaemia. The facts of his admission in hospital and his treatment there, were admitted by him in a written certificate that he submitted to his employers. However, when he took a life insurance policy in May, 2002 (i.e. after his hospital admission and treatment) and filled up the proposal form, he suppressed all these facts with a view to play fraud and thus violated the terms and conditions of the insurance policy. He further took two more policies for Rs. 1 lakh each on 8.5.2002 and 14.8.2002 whose claims are still pending. Since it is settled law that an insurance policy is a contract entered into between the parties in utmost good faith, the insuree by giving wrong statements and suppressing facts violated the terms of the contract/insurance policy. Under these circumstances the Petitioner rightly repudiated the claim.

(3.) The District Forum after hearing both parties allowed the complaint by concluding that the insured had not deliberately made false statements since there was no pre-existing disease which caused his death. The District Forum directed the Petitioner to pay the Respondent the entire insured amount with 8% interest with effect from three months from the date of submission of claim till payment and that interest would serve as compensation. Rs. 3,000 was awarded as litigation costs. The compliance of the order was to be made within one month.