K Radha v. Life Insurance Corporation of India

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY ,THE 01ST DAY OF MARCH 2019 / 10TH PHALGUNA, 1940** ## **WP(C).No.40945 of 2016** ## **PETITIONER:** **K RADHA AGED 45 YEARS W/O LATE DR.A.G.UNNIKRISHNAN, R.K.N. NILAYAM, AKG CENTRE ROAD, SULTHAN BATHERY POST, SULTHAN BATHERY VILLAGE AND TALUK, WAYANAD DISTRICT-673592. BY ADVS. SRI.S.K.BALACHANDRAN SRI.V.K.NANDAKUMARAN** ## **RESPONDENTS:** **1 LIFE INSURANCE CORPORATION OF INDIA REPRESENTED BY THE ZONAL MANAGER, SOUTHERN ZONAL OFFICE, LIC BUILDING, ANNA SALAI, CHENNAI-600 002. 2 SENIOR DIVISIONAL MANAGER DIVISIONAL OFFICE, JEEVAN PRAKASH, KOZHIKODE-673001. BY ADV. SRI.R.S.KALKURA** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19.02.2019, THE COURT ON 01.03.2019 DELIVERED THE FOLLOWING:** **WP(C).No.40945 of 2016** **2** ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The writ petitioner, wife of deceased Dr.A.G.Unnikrishan, is aggrieved by the rejection of insurance claim in respect of her deceased husband, by the 1[st] respondent-Insurance Company. 2. The petitioner's husband was a Doctor in Government service and had taken a policy from the 1[st] respondent-Insurer with policy No.796827735, on 28.06.2011 for a sum of ₹2,00,000/-. According to the petitioner, her husband was not suffering from any disease when he took the insurance policy. Her husband died on 04.11.2011 due to sudden aspiration while having food. The 2[nd] respondentSenior Divisional Manager of the Insurance Company sent Ext.P2 letter to the petitioner informing the petitioner that they have decided to repudiate all liability under the policy on account of her deceased husband having withheld material information regarding his health at the time of effecting the **WP(C).No.40945 of 2016** **3** policy. The petitioner sent a complaint dated 21.05.2014 to the 1[st] respondent against Ext.P2 decision. In the said complaint, the petitioner stated that the deceased had no illness when he took the policy. The deceased worked as a Surgeon in the Government Taluk Hospital, Sulthan Bathery on the days preceding the death. The petitioner specifically stated that her husband was not a chronic alcoholic as stated in Ext.P2. 3. The petitioner's complaint against Ext.P2 was placed before the Zonal Office Claims Dispute Redressal Committee. By Ext.P4, the petitioner was informed that the said Committee has decided to uphold the repudiation decision of the Divisional Office. The petitioner was advised to prefer appeal before the Insurance Ombudsman, in case she has any grievance. The petitioner thereupon appealed to the Insurance Ombudsman. 4. The Insurance Ombudsman relied upon a self contained note given by the respondents to arrive at a **WP(C).No.40945 of 2016** **4** conclusion that deceased husband of the petitioner was diabetic for the past ten years and a chronic alcoholic and these facts were not disclosed while filing the proposal for insurance policy. The Insurance Ombudsman accordingly dismissed the complaint of the petitioner. Hence, the petitioner has approached this Court. 5. Respondents 1 and 2 contested the writ petition filing detailed counter affidavit. According to the respondents, there has been clear fraudulent suppression of facts which was well within the knowledge of the life assured and the suppression was wilful and deliberate. Ext.R1(a) reference letter issued by IQRAA Hospital dated 02.11.2011 would establish that the petitioner was suffering from diabetics for the last ten years and was a chronic alcoholic. The treatment records in respect of the life assured taken from MIMS Hospital would also point towards the same. According to the respondents, the life assured while proposing for the policy, gave wrong information to question **WP(C).No.40945 of 2016** **5** Nos.11(a), (b), (d), (e) and (h). The questions and the answers given by the deceased are as follows:- (a) During the last five years did you No consult a Medical Practitioner for any ailment requiring treatment for more than a week? (b) Have you ever been admitted to any No hospital or nursing home for general check up, observation, treatment or operation? (d) Are you suffering from or have you No ever suffered from ailment pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System? (e) Are you suffering from or have you No ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other disease? (h) Do you use or have you ever used No (1) alcoholic drinks; (2) narcotics; (3) any other drink; (4) tobacco in any form? The aforesaid answers were false and those answers were given knowing fully well that they were incorrect. Therefore, the respondents are justified in repudiating the claim. **WP(C).No.40945 of 2016** **6** 6. I have heard Advocate Sri.S.K.Balachandran, learned counsel appearing for the petitioner and learned Standing Counsel appearing for the respondents. 7. The learned counsel for the petitioner argued that as per Section 45 of the Insurance Act, no policy of life insurance effected after the coming into force of the Act shall after the expiry of two years from the date on which it was effected, be called in question by an Insurer on the ground that a statement made to the proposal for insurance or in any documents leading to the issue of the policy, was inaccurate or false. In order to question the policy, the Insurer has to show that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder knowing the same to be false. 8. The counsel for the petitioner, citing the judgment of the Apex Court in _**Life Insurance Corporation of India v. Asha Goel** [(2001) 2 SCC 160]_ argued that mere inaccuracy **WP(C).No.40945 of 2016** **7** of falsity in respect of some recitals in the proposal would not entitle the Insurer to repudiate a claim and in order to repudiate a claim, the Insurer must prove that the false statement or suppression must be on material aspect made fraudulently by policy holder with knowledge that it was false. 9. Relying on the judgment in _**Mamata Satpathy v. Zonal Manager, LIC of India and others** [AIR 2017 Ori. 54],_ the counsel for the petitioner argued that as long as the life assured himself did not make any misrepresentation, the Insurer need not be justified in repudiating the claim. The learned counsel, relying on the judgment of Jammu and Kashmir High Court in _**Kotak Mahindra Old Mutual Life Insurance Ltd. v. J & K State Consumer Disputes Redressal Commission** [2016 KHC 2391],_ argued that non-examination of the Doctor, who alleged number of ailments suffered by the insurer would be fatal to the repudiation made by the insurer. Failure of the insurer in not having made any independent assessment regarding health **WP(C).No.40945 of 2016** **8** status of insurer at any point of time before his death, will disentitle the insurer to urge suppression of material facts, contended the learned counsel for the petitioner placing reliance of the judgment in _**Bajaj Allianz Life Insurance Company Ltd v. Manisha Naresh Goyal** [ 2018 KHC 3328]_ . The learned counsel further argued that the respondents have honoured four other insurance policies of the deceased and in the circumstances, repudiation of the fifth policy alone is unjustified. 10. The learned Standing Counsel appearing for the respondents on the other hand contended that life insurance policy is a contract of “ _Uberimma fide_ ” between the insurer and the proposer. It is the proposer alone who is aware of the past and present history of the life to be assured. Any misrepresentation/non-disclosure in the proposal form by the proposer would vitiate the contract. 11. According to the learned Standing Counsel, Ext.R1(a) reference letter dated 02.11.2011 issued by IQRAA **WP(C).No.40945 of 2016** **9** Hospital would show that the life assured was suffering from Type-II Diabetes for ten years and was a chronic alcoholic. Ext.R1(b) medical extracts also describe the deceased as a 51 year old gentleman, chronic alcoholic and known case of DM. Further more, Ext.R1(c) certificate dated 24.10.2013 issued by the Taluk Head Quarters Hospital, Sulthan Bathery, where the life assured had worked, would show that he was on medical leave for the period from 01.06.2011 to 08.07.2011. The said Ext.R1(c) would also show that the life assured had suppressed the material facts. In the facts and circumstances of the case, the policy in question was obtained by the life assured on non-disclosure and suppression of material facts. The repudiation of the policy by the respondents, therefore, is perfectly justified. 12. I have considered the pleadings in the writ petition and the arguments made by the counsel. The husband of the petitioner had obtained the insurance policy on 28.06.2011. Therefore, going by Section 45 of the Insurance **WP(C).No.40945 of 2016** **10** Act, the respondents cannot question the policy on the ground of wrong statements or suppression of material facts after 27.06.2013. The respondents for the first time questioned the policy only on 18.02.2014, much beyond the two year period. 13. True, the insurer can still repudiate the policy if it can be shown that the wrong statement/suppressed facts was on a material matter. The respondents are relying on the wrong answers given by the life assured in the proposal form. The respondents contend that the life assured had given five wrong answers in the proposal. These questions and answers have to be considered one by one. 14. Question (a) asked whether during the last five years did the life assured consult a medical practitioner for any ailment requiring treatment for more than a week. The respondents are relying on Ext.R1(a) reference letter to contend that the life assured has given a wrong answer. Ext.R1(a) is dated 02.11.2011, which date is subsequent to **WP(C).No.40945 of 2016** **11** the policy date 28.06.2011. Ext.R1(a) does not state or prove that the life assured had consulted a medical practitioner in the preceding five years for any ailment requiring treatment for more than a week. 15. Question (b) is whether the life assured had been admitted to any hospital or nursing home for general check up, observation, treatment or operation. The life assured had answered in the negative. Neither Ext.R1(a) nor Ext.R1(b) would show that the life assured had been admitted to any hospital or nursing home. The respondents are placing their reliance on Ext.R1(c) certificate, which shows that the life assured had taken medical leave for the period from 01.06.2011 to 08.07.2011. I am of the opinion that the said Ext.R1(c) certificate by itself will not prove that the life assured was admitted in any hospital or nursing home. Employees may take medical leave on medical grounds and in all cases, it cannot be presumed that the employee has consulted a medical practitioner for any ailment or has been **WP(C).No.40945 of 2016** **12** admitted to any hospital/nursing home. Medical leave can be taken even for medical rejuvenation therapy. The respondents should have more credible information and proof to repudiate the policy on that ground. 16. Questions (d) and (e) asked whether the life assured has suffered from ailment pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system, diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other disease, to which the life assured has given answers in the negative. Exts.R1(a) to R1(c) do not show that the life assured has suffered from any of the above diseases, at least as on the date of making the proposal. 17. The argument of the Standing Counsel for the respondents is that Ext.R1(a) reference letter dated 02.11.2011 states that the life assured has been suffering from Type-II Diabetes for ten years. From Ext.R1(a), it cannot be made out that the life assured has given this **WP(C).No.40945 of 2016** **13** information as to suffering diabetes for ten years, to the Physician. It is quite possible that the life assured was unaware of having Type-II diabetes as on the date of making the proposal for insurance. The life assured was a medical practitioner and it may be possible that he was aware of his diabetes while proposing the policy. But, this will only be a presumption. To repudiate the insurance claim on this ground, the respondents will have to possess more credible proof. 18. Similarly, question (h) as to whether the life assured has ever used alcoholic drinks/narcotics/any other drink/tobacco in any form, the life assured has again answered in the negative. The argument of the learned Standing Counsel for respondents is that Ext.R1(a) reference letter from IQRAA Hospital would show that the life assured was a chronic alcoholic. It is to be noted that the proposal for insurance policy was made on 28.06.2011 and Ext.R1(a) has been issued much subsequent to the proposal. The term **WP(C).No.40945 of 2016** **14** “chronic alcoholism” is a non-clinical descriptor. It is possible that the said alcoholic condition has developed subsequent to the date of proposal of the policy. One cannot, without sufficient material, legally assume that the life assured was having the habit of consuming alcohol at the time of making the proposal. On this issue also, the respondents have to rely on more credible information and proof to repudiate the policy claim. 19. Taking into account all the above facts, I am of the considered opinion that the decision of the respondents to repudiate the claim of the petitioner for the reasons explained in Exts.P2, P4, P5 and in the counter affidavit in this writ petition, are unsustainable. The writ petition is therefore, liable to be allowed to a certain extent. Accordingly, Exts.P2, P4 and P5 are set aside. The 2[nd] respondent is directed to reconsider the claim of the petitioner in the light of the observations made hereinabove. It is made clear that the 2[nd] respondent will be at liberty to base his decision on any other **WP(C).No.40945 of 2016** **15** credible materials/proof. The 2[nd] respondent shall take a decision in this regard within a period of two months from the date of receipt of a copy of this judgment. With the above directions, the writ petition is disposed of. Sd/- **N. NAGARESH, JUDGE** aks/27.02.2019 **WP(C).No.40945 of 2016** **16** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1: TRUE COPY OF THE INSURANCE POLICE ISSUED TO THE DECEASED HUSBAND OF THE PETITIONER.** **EXHIBIT P2: TRUE COPY OF LETTER NO.CLAIMS/DO/K079 DATED 18.2.2014 SENT BY THE 2ND RESPONDENT TO THE PETITIONER.** **EXHIBIT P3: TRUE COPY OF THE LETTER DATED 21.5.2014 SENT BY THE PETITIONER TO THE IST RESPONDENT.** **EXHIBIT P4: TRUE COPY OF THE LETTER DATED 9.10.2014 SENT BY THE 2ND RESPONDENT TO THE PETITIONER.** **EXHIBIT P5: TRUE COPY OF THE AWARD NO.IO/KOC/A/LI/0136/2015-16 DATED 30.6.2015 PASSED BY THE INSURANCE OMBUDSMAN, KOCHI.** ## **RESPONDENT'S EXHIBITS:** **R1(A) TRUE COPY OF THE REFERENCE LETTER ISSUED BY M/S.IQRAA HOSPITAL DATED 2.11.2011 ALONG WITH ADMISSION RECORD.** **R1(B) TRUE COPY OF THE TREATMENT RECORDS OF THE LIFE ASSURED FROM MIMS HOSPITAL OF LATE DR.UNNIKRISHNAN A.G.** **R1(C) TRUE COPY OF THE CERTIFICATE ISSUED BY THE TALUK HEADQUARTERS HOSPITAL DATED 24.10.2013.** **R1(D) TRUE COPY OF THE POLICY BEARING NO.796827735 STANDING IN THE NAME OF DR.UNNIKRISHNAN A.G.**