NCDRC Dismisses LIC’s Appeal And Orders It To Disburse Rs. 47.90 Lakh To Nominees

Brief Facts:

Anil Kumar Patel, a resident of Kheda, Gujarat, had procured nine life insurance policies from the LIC. Tragically, within a mere two years of securing these policies, Mr Patel succumbed to a heart attack. Following Mr. Patel's untimely demise, his nominees, who were entitled to the insurance benefits, duly filed claims for all the aforementioned life insurance policies. However, the claims were met with denial by LIC because Mr Patel had failed to disclose material facts during the policy issuance. Subsequently, in pursuit of their rights, the Patel family approached the Kheda District Consumer Disputes Redressal Forum (“District Commission”), which issued a partial ruling in favour of the nominees. Dissatisfied with this outcome, LIC sought recourse by challenging the decision before the Gujarat State Consumer Disputes Redressal Commission (“State Commission”), only to have their appeal met with dismissal. As a last resort, LIC filed an appeal to the National Consumer Disputes Redressal Commission (“NCDRC”).

The nominees of Mr. Patel, as the complainants in this case, contended that the medical certificate about Mr. Patel's depression should be disregarded as evidence. They asserted this position because the certificate lacked the necessary supporting affidavit from the doctor who had issued it. Furthermore, the nominees argued that LIC's panel doctors had conducted medical examinations of Mr. Patel before the issuance of the policies, noting that an additional premium had been levied due to Mr. Patel's excess weight. This, they argued, indicated that no concealment or suppression of material information had taken place.

On the opposing side, LIC contended that Mr. Patel had indeed concealed material facts concerning his medical history and treatment. LIC maintained that this non-disclosure justified the repudiation of the insurance claims. They argued that the repudiation of the claims was valid, given the lack of disclosure of material information by Mr. Patel.

Observations of the Commission:

During the proceedings before the State Commission, the nominees of Mr Patel argued that a medical certificate about his depression should not be considered as evidence due to the absence of an affidavit from the doctor who issued it. Nevertheless, the State Commission admitted the certificate into evidence. The NCDRC, concurring with the State Commission, upheld this decision. The NCDRC relied on the Supreme Court's judgment in the case of Satwant Kaur Sandhu vs. The New India Assurance Co. Ltd (2009) 8 SCC 316, where it emphasized that no affidavit from the doctor is necessary when the insured party has provided authorization to the insurance company to obtain medical information from hospitals. Consequently, the NCDRC concluded that the certificate should be deemed admissible. Therefore, the NCDRC dismissed the appeal filed by LIC and ordered it to disburse a total sum of Rs. 47.90 lakh to the nominees of Mr Patel.

Case: Life Insurance Corporation of India vs. Dr. Nilam Hetalkumar Patel & 4 Ors.

Case No.: RP/1096/2019

Advocate for the Appellant: Mr Neeraj Gupta & Mr Kamal Gupta

Advocate for the Respondent: Ms. Anushree Kapadia

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