LIC OF INDIA Vs. SUREKHA RAMESHRAO MANKAR

JUDGEMENT

(1.) This revision petition has been filed by Life Insurance Corporation of India and Ors. (hereinafter referred to as the 'Petitioners') being aggrieved by the order of the State Consumer Disputes Redressal Commission, Maharashtra (hereinafter referred to as the 'State Commission') in Appeal No. 1892/1999 in which Smt. Surekha Rameshrao Mankar was the Respondent. The facts of the case according to the Respondent who was the original complainant before the District Forum are that her husband Rameshrao Gangaramji Mankar (hereinafter referred to as the 'insuree') had obtained two insurance policies (Policy Nos.980170633 and 980192491) from the Petitioner/Insurance Corporationin December, 1992 and March, 1994 for Rs. 1 lakh and Rs. 50,000 respectively. On 12.4.1995, he expired due to a heart attack for which a death certificate was issued by the concerned Medical Officer. Thereafter, Respondent being the nominee of the deceased insuree lodged claims with the Petitioner/Insurance Corporation in respect of both policies in June, 1995 along with relevant documents. Petitioner/Insurance Corporation repudiated the claim vide letter dated 25.3.1996 and suggested that Respondent could file, a review application which she did but again the claim was repudiated on the ground that the insuree had suppressed material facts that he had suffered from a disease called "Herpes Zoster" relating to the eye. According to the Respondent, this was a curable viral infection of the eye and was thus not suppression of a material fact and therefore, the claim was wrongly repudiated. Respondent, therefore, filed a claim before the DistrictForum requesting that the Petitioner/Corporation be directed to accept the claims of the Respondent in respect of both policies along with interest @ 18% and any other compensation as deemed appropriate.

(2.) Petitioner/Insurance Corporation denied the above contentions and stated that it is on record that in the Insurance Proposal Form relating to his health status, insuree had suppressed the fact regarding his having suffered from Herpes Zoster and had stated that his health was good. Since an insurance policy is a contract between two parties entered into in "utmost good faith", the aforesaid suppression of a material fact justified the repudiation of the insurance claim of the Respondent.

(3.) The District Forum after hearing both parties and considering the evidence on record, allowed the complaint by concluding that the insuree did not suppress any material information by not mentioning about an eye disease in the proposal form because this disease didnothaveanynexus with the insuree's death due to a heart attack. The District Forum therefore, directed the Petitioner/Insurance Corporation to pay the Respondent a sum of Rs. 1 lakh and Rs. 50,000 respectively in respect of the two policies along with interest @ 18% per annum from the date of filing the original claim till the date of payment as well as Rs. 500 as compensation.