LIC OF INDIA Vs. PREMLATA AGGARWAL

JUDGEMENT

(1.) Life Insurance Corporation of India (hereinafter referred to as the Petitioner') has filed the present revision petition being aggrieved by the order of the State Commission in Appeal No. 755/99 wherein Smt. Premlata Aggarwal was the Respondent.

(2.) The facts of the case are that the Respondent's son (hereinafter referred to as the 'insuree') had taken an insurance policy with accident benefit for a sum of Rs. 1 lakh on 31.1.1994 and had deposited the required premium for the same. On 30.8.1994 the insuree died and the Respondent being a nominee filed a claim with the Petitioner/Insurance Company. The claim of the Respondent was repudiated by the Petitioner/Insurance Company on the grounds that the insuree had suppressed material information pertaining to his ailments and hospital treatment prior to his taking the insurance policy. According to the Respondent except for inflation in the lungs for which the insuree had undergone an operation 10 years ago and which was an ordinary disease, he did not suffer from any other ailments including T.B. and, therefore, the claim was wrongly repudiated specially since there was no nexus between his illness 10 years ago and his death. Respondent, therefore, filed a complaint before the District Forum on grounds of deficiency in service requesting that Petitioner/Insurancebe directed to pay the Respondent Rs. 1 lakh towards insurance claim, Rs. 20,000 as compensation for mental agony and, Rs. 25,000 for economic loss along with litigation cost of Rs. 1,100.

(3.) Petitioner on the other hand stated that the claim of the Respondent was rightly repudiated because in the insurance proposal form, the insuree had given incorrect answers by stating that he had not been to any hospital for any medical check-up nor was he suffering from any ailment pertaining to heart, lungs, kidney, etc., that he never consumed alcohol and that his general state of health was good. On the other hand, on the basis of available records including from the hospital it came to light following an investigationby the Petitioner that all these facts were incorrect because apart from suffering from T.B. and pleural inflation, he was also addicted to consuming alcohol and further he was admitted to hospital from 27.7.1993 to 31.7.1993 and then again on 30.8.1994 i.e. prior to his having taken the insurance policy on 31.1.1994. Since an insurance policy is a contract entered in utmost good faith between the two parties, by suppressing this material information pertaining to his health, the insuree violated this contract and therefore, the claim of the Respondent was rightly repudiated.