Case: P. Vankat Naidu Vs. Life Insurance Corporation Of India & Another

1. Leave granted. 2. This appeal is directed against the order of the National Consumer Disputes Redressal Commission (for short, `the National Commission) by which the revision filed by the respondents was allowed and the order passed by the A.P. State Consumer Disputes Redressal Commission (for short, ?the State Commission?) upholding the order of District Consumer Disputes Redressal Forum, Kurnool (for short, ?the District Forum?) for payment of Rs. 10,00,000 to the complainant-appellant with interest at the rate of Rs. 12% per annum was set aside.3. P. Srikanth, son of appellant, who was a Class I Contractor obtained a policy on 28.4.2002 for Rs. 10,00,000. In column 11(A) of the proposal form, the insured had indicated that during the last five years he had not consulted any medical practitioner for any ailment. The insured died on 19.12.2003 due to cardiac respiratory failure. Being the nominee of the insured, the appellant submitted claim on 16.4.2004 but did not get favourable response from the respondents.4. After some time, he filed Consumer Complaint No. 30 of 2005 for issue of direction to the respondents to pay the insurance amount with bonus and interest at the rate of Rs. 24% per annum. The respondents contested the complaint and pleaded that the complainant was not entitled to the insurance amount because at the time of taking policy the insured had suppressed the facts relating to his illness.After considering the pleadings and evidence produced by the parties, the District Forum allowed the complaint and directed the respondents to pay Rs. 10,00,000 with 12% interest and compensation and cost of Rs. 10,000 each. While analyzing the evidence of Dr. B. Shankar Sarma (RW1) produced by the respondents, the District Forum made the following observations:?The evidence of Doctor B. Shankar Sarma (RW1) says on the admission of said P. Srikanth in G.G. Hospital at his wish as came with a complaint of Abdominal pain and the said Srikanth was under his care and during his treatment the said Srikanth left for himself on his own accord of better treatment to an higher institution. The evidence of said doctor does not say the line of treatment he has given to said Sri. P. Srikanth. Nor does it say the taking of ECG for three times of said patient as envisaged in Ex. B1. Nor any case sheet is filed as to the actual complaint with which the said P. Srikanth approached said G.G. Hospital and treatment he has given nor does the evidence of said doctor says the nature of said ailment in medical terms except it alleging the complaint of abdominal pain. Nor does his evidence says it as a casual one or chronic one and his diagnosis made on said complaint of the patient. Nor his evidence says it as a casual one or chronic one and his diagnosis of said complaint and the medicines he administered to the said patient during his treatment. Nor anything was elicited from said doctor that the alleged complaint with which the said patient P. Srikanth approached underwent treatment was capable enough to cause in due course such a death the said complaint of said patient P. Srikanth to believe of his existence at the time of taking the policy to find the said patient quality of its omission in the declaration of his good health proposal and questionnaire there in. While such is so the evidence of said Doctor B. Shankar Sarma as RW1 says that he has not treated the said insured policy holder Srikanth for any cardiac complaint. In the absence of any other cogent proof as to the said patient earlier heart ailment or other ailments alleged by the opposite parties side it cannot be taken that the said insured policy holder P. Srikanth was a chronic heart patient with great risk to life and that was suppressed by said insured policy holder Srikanth to have an undue advantage in future under that policy. Especially when the elector cardio gram report dated 3.9.2002 of the said insured policy holder P. Srikanth shows no abnormality.?The State Commission dismissed the appeal filed against the order of the District Forum and approved the direction given for payment of the insurance amount to the appellant with interest. The State Commission also adverted to statement of Dr. B. Sankar Sarma and observed:?The evidence of Dr. Shankar Sarma states that he has treated the assured for abdominal pain and there is no evidence placed by the appellants to substantiate that the assured was treated for cardiac problem. It is held by the National Commission in 1996 (3) CPR 229 (NC) in Smt. B. Chinnamma v. Divisional Officer, LIC of India, that when the assured underwent treatment for peptic ulcer and died of heart attack which has no nexus with the peptic ulcer, repudiation made by the insurer is arbitrary. It is also stated that the so called ailment for which the deceased was treated in the hospital during the said period had no nexus whatsoever with the caused of death. It is stated in the death certificate that he died of heart stroke. In the absence of any other cogent proof as to the policy holder had heart ailments and other ailments alleged by the appellants, it cannot be said that the insured policy holder was a chronic heart patient with great risk to life and the same was suppressed by him. The District Forum has rightly allowed the complaint and his order in our opinion does not suffer from any infirmity so as to call for any interference by this Commission in exercise of its appellate jurisdiction."5. The National Commission reversed the concurrent finding recorded by the District Forum and the State Commission by a cryptic order, the relevant portion of which is extracted below:?In the case before us, the information relating to hospitalization and treatment was specifically sought in the proposal form but it was suppressed by the assured. Therefore, the Insurance Company was justified in repudiating the claim due to suppression of relevant information relating to the health of the assured which had material bearing on the risk to be assumed by the Insurance Company.? 6. We have heard learned Counsel for the parties and carefully perused the record. In our view, the finding recorded by the District Forum and the State Commission that the respondents had failed to prove that the deceased has suppressed information relating to his illness was based on correct appreciation of the oral and documentary evidence produced by the parties and the National Commission committed serious illegality by upsetting the said findings on a wholly unfounded assumption that the deceased has suppressed information relating to hospitalization and treatment.7. Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness.

Decision reasoning: 1[ds]In our view, the finding recorded by the District Forum and the State Commission that the respondents had failed to prove that the deceased has suppressed information relating to his illness was based on correct appreciation of the oral and documentary evidence produced by the parties and the National Commission committed serious illegality by upsetting the said findings on a wholly unfounded assumption that the deceased has suppressed information relating to hospitalization and treatment.7. Since the respondents had come out with the case that the deceased did not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation. However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment. Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness.