Smt. Tarannum Khatoon vs Branch Manager, L.I.C. Of India ...
2011 Latest Caselaw 3983 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Court No. - 2
 
Case :- WRIT - C No. - 40027 of 2009
 
Petitioner :- Smt. Tarannum Khatoon
 
Respondent :- Branch Manager, L.I.C. Of India Ghazipur And Others
 
Petitioner Counsel :- A.K. Gautam
 
Respondent Counsel :- R.C. Shukla,S.C.
 

 
Hon'ble Ashok Bhushan,J.

Hon'ble Bharati Sapru,J.

Heard learned counsel for the petitioner and Sri R.C. Shukla, learned counsel appearing for the respondents no. 1, 2 and 3. Counter and rejoinder affidavits have been exchanged between the parties. We propose to dispose of the matter finally.

By this writ petition, the petitioner has prayed for quashing of the orders dated 1st May, 2008, passed by Senior Divisional Manager, Life Insurance Corporation, Varanasi and order dated 19th May, 2009, passed by Regional Manager, Kanpur (here-in-after referred to as 'Corporation'). By the order dated 1st May, 2008 the Senior Divisional Manager of the Corporation rejected the petitioner's claim under the insurance policy taken by Late Shahid Khan, husband of the petitioner. Subsequently order dated 19th May, 2009 was passed by the Regional Manager of the Corporation rejecting the petitioner's representation, which was disposed of in pursuance of an earlier order of this Court dated 13th April, 2009 passed in writ petition no.63982 of 2008.

The petitioner's case in the instant writ petition is that the petitioner is widow of Late Shahid Khan. Shahid Khan took a L.I.C. policy on 21st September, 2006, namely, "Jeevan Mitra (Triple cover) endowment plan with profit (with accident benefits)" for an amount of Rs.1,00,000/= for a period of 15 years. The petitioner's case is that at the time of taking the policy, the petitioner's husband was healthy and there was no complaint of any ailment or any disease. The Corporation also prepared the medical examination confidential report and on being found the petitioner's husband healthy, the policy bond was issued. The petitioner's husband subsequently died in Bhabhuwa Sadar Hospital, Bihar in the custody of police on 6th September, 2007. The petitioner being nominee of the aforesaid policy made an application for claim under the policy. The said claim was rejected by the order dated 1st May, 2008. The reason given with the rejection of the claim was that petitioner's husband was suffering from Kidney disease and anaemia much prior of taking of the policy, which was not disclosed at the time of taking the policy. The order also mentions that if the petitioner is not satisfied, she can submit a representation to the Regional Manager. The petitioner submitted a representation to the Regional Manager challenging the rejection of the claim and also came to this Court by filing a writ petition being writ petition no.63982 of 2008, which was disposed of directing the Regional Manager to decide the matter. The Regional Manager rejected the claim again approving the earlier decision. The Regional manager observed in the order that the petitioner was suffering from Kidney disease prior of taking L.I.C. Policy.

Learned counsel for the petitioner challenging the orders impugned in the instant petition contends that the decision of the Corporation rejecting the claim is an arbitrary decision. The petitioner's husband at the time of taking the policy was medically examined by the Doctor of Corporation and was found not suffering from any disease. It is further submitted that at the time of death, the petitioner's husband was only 33 years of age and the rejection of the claim was totally arbitrary.

Sri R.C. Shukla, learned counsel for the respondents refuting the submissions made by learned counsel for the petitioner contended that after the death of petitioner's husband, the Corporation had conducted an investigation and came to know that petitioner's husband took treatment in Sar Sundar Lal Hospital, Kashi Hindu Vishwavidyalaya (In short "BHU") in July, 2007 and also obtained opinion of the private Doctor on 17th February, 2008 and the Corporation was satisfied that he was suffering from Kidney disease much before taking of the policy and thus the Corporation is perfectly right in rejecting the claim of the petitioner. Sri Shukla further submits that even if the petitioner's husband was suffering from any disease or ailment after taking the policy, he ought to have informed the Corporation about the disease. Sri Shukla has also placed reliance on three judgements of this Court as well as on one judgement of the Apex Court, which shall be referred to while considering the submissions in detail.

Learned counsel for the petitioner has also placed reliance on two judgements of this Court.

We have heard learned counsel for the parties and perused the records.

There is no dispute that the policy was taken by the petitioner's husband on 21st September, 2006 and at the time of taking of the policy, he was also medically examined by the Doctors of the Corporation and no disease was noted in the report. The copy of proposal of policy has been annexed as Annexure-'1' to the writ petition, which also indicate the age of other family members, including the date of birth of the petitioner's husband. At the time of taking the L.I.C. Policy, the deceased was 33 years and his date of birth was 20th July, 1973. The age of his mother and father was also mentioned as 60 and 61 years, respectively.

The claim was submitted that petitioner's husband died on 6th September, 2007 at Sadar Hospital, Bhabhuwa, Bihar on account of anaemia and Cardiac arrest. The rejection of the claim has been made on the ground that petitioner's husband was suffering from kidney disease and anaemia since before taking of the policy, which was not disclosed by him, hence her claim is rejected.

A counter affidavit has been filed by the Corporation in the instant writ petition in which the Corporation has placed reliance specially on three materials; firstly, the medical prescription (Outdoor) of BHU dated 11th August, 2007 and secondly the medical opinion obtained by the Corporation from its own private doctor dated 17th July, 2008, which is annexed as Annexure-CA-4 to the counter affidavit and the Post Mortam report. The opinion given by the doctor of the Corporation dated 17th July, 2008 was obtained after the death of the patient allegedly on the basis of OPD slips of BHU. The OPD slips, which have been annexed by the respondents, only says that the petitioner's husband was treated on 11th August, 2007 and thereafter on the advise of the hospital various medicines and tests have been prescribed. The OPD slips, Annexure CA-1 to the counter affidavit does not suggest or record any medical history suggesting that deceased was suffering from kidney disease or anaemia since last five years as has been opined by Doctor of Corporation in his certificate dated 7th July, 2007. The slips, which have been filed as Annexure CA-'1' to the counter affidavit (at page 25) suggest that patient was examined on 20.08.2007, complain of Nausea and vomiting as well as weakness and dizziness was noted for last 20 days. There can not be any dispute that a person who takes an insurance policy, if he is aware of any disease from which he is suffering which is serious in nature, he ought to have disclosed the same at the time of taking the insurance policy/cover. In the present case, the respondents have filed in the counter affidavit the medical prescription dated 11th August, 2007 i.e. the treatment under which the deceased went after 10 months of taking the insurance policy and the medial prescription does not even suggest about the medical history or any disease of which the petitioner's husband was suffering from years.

We fail to appreciate the opinion obtained by the Corporation by his own doctor, which was obtained on 17th February, 2008 much after the death of the deceased that he was suffering from "Chronic Renal Failure". The relevant portion of the said opinion of doctor is quoted below :-

"As per OPD slip of I.M.S. BHU dated 20.8.07 shows that LA was a known case of CRF ( Chronic Renal Failure). Chronic Renal Failure takes about minimum five years to develop. Means LA suffering with this problem for last about five years."

The petitioner in her claim submitted to the LIC has claimed that the deceased has died due to anaemia and Cardiac arrest. There is no material to support the view taken by the private doctor dated 17th February, 2008, that there was a case of Chronic Renal Failure. In the counter affidavit or materials brought on the record, there is no material to suggest that petitioner's husband took any treatment prior to taking the insurance policy or it was known to him that he was suffering from any disease. The insurance cover was taken by a person who was 33 years of age.

The respondents-Corporation has also placed reliance on the Post Mortam report, which has been filed as Annexure-CA-2. Although Post Mortam report mentions death due to severe anaemia and non-functional Kidney leading to cardiac arrest, but the said Post Mortam report can not be basis of any finding or conclusion that the deceased was suffering from any Kidney disease at the time of taking policy bond.

Learned counsel for the respondents-Corporation has placed reliance of Division Bench Judgement in the case of Smt. Maya Tripathi Vs. Sr. Divisional Manager, L.I.C. and Another decided on 10th July, 2003 in writ petition no.36904 of 1991, where the Division Bench has upheld the order of the Corporation rejecting the claim. The reason given by the Division Bench in the said judgement for rejecting the claim clearly explain the reason for rejection of the claim. It is useful to quote the following observation made by the Division Bench :-

"No doubt, the discharge certificate was issued in the year 1987, while the husband of the petitioner took the policy in the year 1985, but we are of the view that the petitioner was suffering from serious ailments prior to taking the policy in the year 1985. thus, inference can be drawn from the discharge certificate (annexure C.A.III) itself. It is a common knowledge that when a person has an ailment, he first goes to a local doctor. It is only much later that the person ordinarily goes to All India Institute of Medical Science, New Delhi, when the treatment of the local doctor fails. Thus this fact is undisputed that the petitioner had been suffering for six years as stated in the aforesaid discharge certificate (annexure C.A.III)."

From the aforesaid, it is clear that there was material in the said case of Smt. Maya Tripathi that the deceased was suffering from the serious disease for last six years. There can not be any dispute to the proposition that non disclosure of known disease entail the rejection of claim by the insurance Corporation. Thus, the said judgement also does not help the respondents in the present case. Another judgement relied upon by the respondents' counsel in the case of Shanta Bai alias Basanta Devi Vs. Life Insurance Corporation of India and others in writ petition no.26862 of 2002 decided on 21st August, 2003. In the aforesaid case the deceased took policy in the year 1998. The insurance claim was rejected in the investigation which was carried on by the Corporation, it was found that the deceased was hospitalised from 18th May, 1998 to 3rd June, 1998, which fact was never disclosed in the proposal form. On the aforesaid facts, the action of the Corporation was upheld. In the aforesaid judgement, the Division Bench has observed as under :-

"A perusal of the impugned order dated 25.11.2000 (Annexure-10 to the petition) shows that the petitioner's husband was hospitalized from 18.5.1998 to 3.6.1998 in the North Eastern Railway Hospital, Allahabad. In the policy form when a specific query was made whether during the proceeding 5 years the applicant suffered from an illness due to which he had to get treatment for more than one week he replied in the negative to the query. He also replied in the negative to the query whether he had to be hospitalized and that he was absent from work due to illness. The petitioner's husband gave false answer to this specific query also and hence it is evident that he obtained the policy by misrepresentation. We are thus satisfied that L.I.C. was perfectly justified in rejecting the petitioner's claim as in our opinion her husband had obtained the policy by stating false facts and concealing facts."

In the present case, there is no material referred to or relied in the counter affidavit, which may suggest that petitioner's husband took any medical treatment prior to taking of the policy bond. In the proposal form the deceased had answered that he never took any medical treatment, nor he was ever hospitalised. There is no material brought on the record by the respondents to indicate that petitioner's husband took any medical treatment prior to taking of policy or was ever hospitalised.

The another case relied upon by respondents' counsel in the case of Sushila Devi Vs. Life Insurance Corporation of India in writ petition no.39028 of 2002, decided on 15th March, 2007, was a case where the writ petition was dismissed. There was a finding recorded by the Division Bench that the deceased underwent the medical treatment for months together before taking the policy. The finding recorded by the Division Bench is quoted below :-

"On the other hand, Shri Prakash Padia, learned counsel appearing for the respondents submits that while filling up the .....for getting the Insurance Policy petitioner's husband had furnished wrong information, particularly, saying that he had never been ill for a period of one week, or hospitalised for any ailment for one week in the last five years; and he was having very good health. The respondents conducted an inquiry on the basis of which they came to know that the department wherein petitioner's husband was serving he had taken leave on three occasions for months together before taking the said Policies, and therefore, it was a clear cut case of concealment, and no interference is required."

The judgement which has been relied upon by learned counsel for the respondents in the case of Mithoolal Nayak Vs. LIC of India, reported in AIR 1962 SC, 814, was also a case where the insured person had been found guilty of mis-statements and fraudulent suppression of material information on the basis of which the Hon'ble Apex Court decided the case against the insured person. In the said case, the second proposal was submitted on 16th July, 1944 and a finding was recorded that the deceased consulted the Physician at Jabalpur and was examined and treated by the said doctor between 7th September, 1943 and 6th October, 1943. Thus, there was entire material and basis for recording the finding that at the time of proposal and before the taking proposal, he was treated medically, therefore the said case is also on its own facts.

Learned counsel for the petitioner has relied upon the judgements in the case of Smt. Meena Sahu alias Meenu Sahu Vs. L.I.C. of India and another, reported in 2006(2) AWC, 1295 and Umeash Narain Sharma Vs. New India Assurance Company Ltd. and others, reported in 2007(1) AWC, 487. The Division Bench in the case of Smt. Meena Sahu has also considered the case of Mithoolal Nayak, AIR 1962 SC 814. The following was laid down in para 10, which reads as under :-

"In the instant case, the proposal form was not filled in by the deceased in his own handwriting. The deceased had no educational qualification. The deceased being a man of 36 years was supposed to be a healthy person. The medical examiner's confidential report enclosed with the policy in question reveals that no sign or symptoms of suffering from any physical disorder more particularly of jaundice were found in the medical examination of life assured by the doctor of the corporation nor the Life Insurance Corporation has produced any evidence to show that three was misrepresentation of facts which if known earlier would have stopped the Corporation from issuing the policy. The medical examiner of the Corporation having examined the assured and submitted a favourable report regarding his health, the Life Insurance Corporation cannot wriggle out of the contract by saying that it was void or voidable at its option. It is not a case where the L.I.C. of India would not have consented to the contract of the insurance but for misrepresentation or suppression of material facts. The facts of the present case are distinguishable from Mitthoolal Nayak's case (supra). In the said case the policyholder had taken policy a few months before his death. In the present case there is no evidence that the policyholder was treated for any serious ailment short time before the taking of the policy. The L.I.C. of India, its development officer and other staff including the medical practitioner who has examined the person insured owe a responsibility to the person to whom they sell insurance and they are presumed to be acting in the interest of the Corporation. The L.I.C. of India cannot disclaim the liability to make payment of assured amount under life policy No. 310786680 for the acts and omissions of its development officer or medical practitioner appointed by it to examine the deceased before accepting the proposal."

Another judgement which has been relied upon by learned counsel for the petitioner is 2007 (1) AWC, 487 - Umeash Narain Sharma Vs. New India Assurance Company Ltd. and others. In the aforesaid case, Mediclaim Insurance Policy was taken by the insured. An application was submitted by the insured of medical treatment, which was rejected. The following was laid down by the Division Bench in para 17, which reads as under :-

"From a reading of the aforesaid clause, we find that it will apply to such diseases which were in existence at the time of proposing the insurance policy, i.e., prior to the effective date of the insurance. It is the own case of the respondents that when the fresh policy was issued on 30.1.2001, being Policy No.48/8652 in the proposal form the petitioner had declared that there was no pre-existing complaint regarding his health vide paragraph 7 of the counter-affidavit filed by Shailendra Shukla, Deputy Manager, Legal. It is presumed that the respondents had checked and verified all the informations given in the proposal form by the petitioner before issuing the mediclaim insurance policy. Thus, it is no right to say that the petitioner is known case of CAD since 2000. In the counter-affidavit except for a bald statement that the petitioner is a known case of CAD since 2000, neither any document nor any material has been brought on record to establish the said averments. In view of the specific averments made in paragraph 7 of the counter-affidavit filed by Shailendra Shukla on behalf of the respondents, the stand taken by the respondents for rejecting the claim cannot be sustained."

From the aforesaid materials brought on record and submissions made by learned counsel for the parties, we are satisfied that neither there was any material with the Corporation to come to the conclusion that the petitioner's husband underwent any medical treatment prior to taking of policy bond or was ever hospitalised. There being no material suggesting to the aforesaid, the conclusion recorded by the Corporation that the petitioner's husband had concealed the material facts at the time of proposal is perverse. The question of concealment of fact arises only when a person is said to be aware of a particular fact. In so far as the second submission of learned counsel for the Corporation that even if the petitioner's husband underwent medical treatment after taking of the policy, he ought to have informed the Corporation about the subsequent treatment, suffice it to say that no such ground has been taken in the impugned order rejecting his claim. The respondents cannot be permitted to add a new ground for rejection of the claim in arguments, which has not been mentioned in the impugned order.

The aforesaid two judgements relied upon by learned counsel for the petitioner support the submissions of the petitioner's counsel. We are satisfied that there was no material before the Corporation to record a finding that the deceased has concealed any disease or any treatment which he underwent before taking of the proposal and the rejection of the claim in such facts and circumstances is totally arbitrary and unjust. The deceased died on 6th September, 2007. Four years have passed from the aforesaid date and his widow has been waiting for the benefit of the policy for last more than four years.

We are of the view that the Corporation in addition to the amount, which was entitled to be paid under the policy, shall also pay the interest at the Bank rate on the said amount calculating the same with effect from the date of death of the deceased. The impugned orders dated 1st May, 2008 and 19th May, 2009 passed by the respondents are set aside. The respondents are directed to make the payment, as directed above, within one month from the date a copy of this order is produced before them. The writ petition is allowed. No costs.

Order Date :- 20.08.2011.

Rks.