LIC OF INDIA Vs. RUKMA

JUDGEMENT

(1.) This revision petition has been filed by LIC of India (here in after referred to as the 'Petitioner') being aggrieved by the order of the State Consumer Disputes Redressal Commission, Rajasthan (hereinafter referred to as the 'State Commission') in Appeal No. 454/1999 in which Smt. Rukma who was the original complainant before the District Forum, is the Respondent. In her complaint before the District Forum, Respondent had stated that her late husband, Rameshwar Lal Chaudhary (here in after referred to as 'insuree') had obtained an insurance policy from Petitioner/ Insurance Corporation for Rs. 50,000 for the period from 26.11.1994 under New Jan Raksha Plan (Profit with Accidental Benefit). The premium was regularly paid and there was no default. The insuree expired on 26.10.1995 and the Respondent as his nominee filed an insurance claim with the Petitioner along With relevant information and documents as required by the Petitioner. However, on 21.2.1997, Petitioner/Insurance Corporation repudiated the claim of the Respondent on the grounds that the insuree had suppressed material information regarding his health at the time of filling up the insurance proposal form by not divulging in the relevant column that 4 years and 8 months prior to his taking the insurance policy, he had suffered from a head injury for which he had taken treatment in a hospital and had also filed a case in the Motor Accident Claims Tribunal (MACT) in which he had cited the facts regarding his head injury. Respondent, however, challenged the repudiation letter on the grounds that the cause of death of her husband due to Epilepsy was not related to the injury sustained in the accident. Under the circumstances, no material fact or information was concealed and since the claim was wrongly repudiated, Respondent filed a complaint before the District Forum on grounds of deficiency in service and requested that Petitioner be directed to pay her a sum of Rs. 50,000 towards the insurance claim of the insuree with interest @ 24% per annum, Rs. 1 lakh towards mental agony and harassment and Rs. 2,200 as litigation cost.

(2.) The above contentions were denied by the Petitioner who stated that there was evidence on record including in the case filed by the insuree before MACT claiming Rs. 3,86,500 for loss of memory and understanding power because of the head injury which he had suffered in the accident on 18.3.1990. Since, this important information had been withheld while filling up the insurance proposal form and the insuree had given incorrect information the claim was rightly repudiated.

(3.) The District Forum after hearing both parties and considering the evidence on record dismissed the complaint on the grounds that there was adequate evidence on record to prove that the insuree had suffered a head injury and the Epilepsy due to which he expired was a result of the earlier head injury. Further, the facts pertaining to the head injury had not been disclosed in the proposal form and since an insurance policy is a contract entered in utmost good faith between the parties, by not disclosing that he had suffered a head injury, insuree had breached the contract of insurance and therefore, the claim was rightly repudiated.