LIFE INSURANCE CORP. OF INDIA VS SMT GURVINDER KAUR 

INTRODUCTION

The case of “Life insurance Corp. of India vs SMT Gurvinder Kaur. 2013 resolved a complicated legal issue pertaining to liability of Life Insurance Corporation of India to pay the benefit amount if the insured fails to disclose all the facts related to his health and specifically it deals with effect of concealment of facts related to health during revival of policy on the liability of insurance company. The case came to light when Kanwaljit Singh (Husband of the respondent) who had obtained an insurance policy from LIC with profit and accidental benefit in the sum of Rs.1,00,000/- on 12.06.2001. Kanwaljt Singh fell ill in 2004 and later died on 08.08.2004. It was alleged that LIC the petitioner in the case denied the claim on filmsy ground. Aggrieved of the acts of LIC respondent filed complaint in district forum which ruled in favour of Smt Gurvinder Kaur, LIC appealed to State commission which upheld the decision of district forum, again not being satisfied by decision of state commission LIC filed revision petition in NCDRC which ruled in favour of LIC.

FACTS OF THE CASE

1. Kanwaljit Singh (Husband of Respondent) had obtained an insurance policy from Life Corporation of India on 12.06.2001 with an accidental benefit of 1,00,000/-.
2. Kanwaljit Singh Fell ill in year 2004 and later expired on 08.08.2004. His NOK Smt. Gurvinder Kaur was denied the payment of accidental benefit by LIC citing the reason that policy has lapsed due to non -payment of premium on 14.06.2003. It was revived on 1.11.2003 and at the time of revival deceased gave false statements in respect of his health and misrepresented himself and thus LIC is not liable to pay the benefit amount.
3. Respondent approached the District Forum with a complaint claiming the amount assured, alleging that, it was explained to LIC about the illness of the diseased who suffered right renal calculi after September, 2003 but had no other illness for 8 years.
4. The District Forum decided the complaint and ruled in favour of respondent and directed the petitioner to pay the maturity amount of the policy along with 5000/- as compensation and 9% interest and Rs.2,000/- as cost of litigation.
5. The petitioner being aggrieved by order of District forum filed the appeal before the State Commission, which was dismissed SCDRC, Delhi vide order in Appeal No. FA/2008/45. Aggrieved by the order of the state commission, LIC filed a revision petition in the National Consumer dispute resolution commission (NCDRC).

ISSUES RAISED

1. Whether concealment of facts about personal health during revival of policy will lead to non-liability of the insurer?
2. Whether the insurance company was liable to pay the accidental benefit amount?

CONTENTIONS OF APPELLANT 

1. The appellant accepted the issuance of the above said policy in the name of Kanwaljit Singh and the same was lapsed due to non-payment of half-yearly premium which was due on 14.04.2003 and it was again revived on 01.11.2003. 
2. The appellant submitted that at the time of revival diseased submitted his statement of personal health in which contained false statement of his health as he was operated on 08.09.2003, but this fact was not disclosed in his statement during revival.
3. The appellant submitted that at the time of revival of policy, the declaration form objectively enquired about the personal health and the answers to question No.2 were in negative in which it was asked whether the insured has any disease or had undergone treatment lasting for more than a week or more. Questionaire enquired about any operation underwent by insured which was also answered in negative.  
4. Appellant thus furnished the records of Jeevan mala hospital which stated that Kanwaljit singh was admitted in Jeevan Mala Hospital on 08.09.2003, operated on same day on account non-functioning of right renal calculi and was discharged on 11.09.2003. Also, it was submitted that as per deceased previous treatment record by Sri Ganga Ram Hospital deceased underwent treatment in September 2003.
5. Appellant citing the pronouncement of commission in LIC vs Smt Kempamma decided on 24.01.2013 in which it was held that at the time of revival of policy, a new contract comes into existence and if assured suppresses material fact or gives false declaration regarding his health, Insurance company is entitled to repudiate claim
6. Appellant thus on the basis of ruling given in Kempamma case (supra) submitted that since insured Mr Kanwaljit Singh has suppressed facts with respect to his health and in view of the same prayed for the dismissal of the order passed by the state commission.

CONTENTIONS OF RESPONDENT 

1. The respondents admitted that policy issued to Mr. kanwaljt Singh lapsed due to non-payment of half-yearly premium on 14.06.2003 but later on revived on 1.11.2003.
2. Respondent also submitted that LIC was explained about the disease of  insured who suffered right renal calculi in September 2003 and apart from this he had no other illness in the past 08 years..
3. Respondents contended that at the time of revival of the policy, the facts about the personal health of the insured was disclosed to the petitioner by the deceased, but the agent had filled the wrong answers in the personal statement regarding personal health. 

JUDGEMENT

National Consumer Dispute Resolution Commission after hearing both the parties and thorough and due perusal of the documents put on record to the commission accepted that deceased Mr. Kanwaljit Singh had suppressed the facts which were required to be disclosed at the time of revival of insurance policy and as a consequence of which a new contract made was not enforceable.

NCDRC accepted the petition and dismissed the order passed by state consumer dispute resolution commission in this case with no cost on the basis of decision of the commission in the case of LIC vs Smt Kempamma decided on 24.01.2013 in which commission held that at the time of revival of policy, a new contract comes into existence and if assured suppresses material fact or gives false declaration regarding his health, Insurance company is entitled to repudiate claim.

ANALYSIS

1. Duty of the person being insured. – The case provides the insight that everyone who is adopting an insurance policy must disclose all the facts related to his personal health at the time of taking policy and even at the time of revival of policy if the policy has lapsed due to any reason. 
2. Liability of LIC on suppression of the facts by the insured at the time of revival of policy. – case reaffirmed that during the revival of policy a new contract comes into force and clearly establishes that if the insured has supressed the facts regarding to his personal health at the time of revival of policy the new policy will not be valid. hence Liability of LIC to pay the amount is absolved.
3. Declaration Form: Case clearly accepted that once a person will fully signed a declaration form in which he has answered the question in a manner , it will not accepted that the person who signed the form was of different opinion verbally unless it has been brought to notice at any forum that signature was obtained by misrepresentation or fraud or due to any other influence..  
4. Court’s Final Verdict – The case ultimately held that decision of the SCDRC was incorrect in deciding the case. NCDRC absolving the liability of the insurer to pay the accidental benefit amount accepted the petition.

CONCLUSION

In conclusion, the case of Life insurance Corp. of India vs SMT Gurvinder Kaur. 2013 sets a crucial legal precedent in the arena of determining the liability of the insurer in a case in which insured has suppressed the facts pertaining to his health. It clearly establishes that a new contract into being at time of the revival and sets rules that insurer in not liable to pay the benefit amount if the insured has concealed facts related to his personal health at the time of revival.

REFERENCES

1. https://indiankanoon.org/

This Article is written by Dhirendra Singh student of PES Modern Law College, Pune ; Intern at Legal Vidhiya.

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