Mere Suppression Of Taking Treatment Or Obtaining Medical Leave Not Reason To Deny Entire Life Insurance Claim: Madras High Court

Justice GK Ilanthiraiyan thus came to the aid of a widow, whose claim was rejected by the Life Insurance Corporation after her husband's death. The court noted that the petitioner's husband had died due to a sudden cardiac arrest and thus she was entitled to the claim amount as per the policy. The court thus directed the LIC to disburse the policy amount with 6% interest.

“This suppression cannot be the reason for denial of entire claim. Now, the insured lost his life due to sudden cardiac arrest. Therefore, the petitioner is entitled for the claim amount as per the policy. In view of the above, the impugned order passed by the respondent dated 04.02.2021 is liable to be quashed and accordingly it is quashed. The respondent is directed to disburse the policy amount with interest at the rate of 6% p.a., from the date of claim namely 01.07.2020 till the date of payment without a period of four weeks from the date of receipt of a copy of this order,” the court said.

The petitioner Ezhilarasi informed the court that her husband was working as Principal Incharge in Government Arts and Science College, Manimedu when he had taken the life insurance policy for a sum assured of Rs 10 Lakh. Ezhilarasi was named as the nominee in the policy. In 2020, Ezhilarasi's husband had a chest pain and though he was immediately taken to the hospital, he died without taking any treatment. After this, when Ezhilarasi made a claim under the policy, her claim was rejected on the ground of suppression of material facts.

The LIC submitted that while taking the policy, the petitioner's husband had suppressed the fact that he had previously suffered chest pain and cardiac arrest. It was contended that on verification of records, it was found that her husband had also availed leave on medical grounds on various occasions, which he had suppressed. The respondent corporation thus pointed out that if the facts had not been suppressed, it would not have accepted the proposal for Rs. 10 Lakh.

The court noted that while it was true that the petitioner's husband had taken medical leave, he had not undergone any surgery or treatment post 2016. The court noted that the husband had only suffered fever and typhoid during that time which was incidental to anyone's life. Further, the court also noted that there was no evidence to show that the husband had any chronic heart ailments.

The court further noted that while filling out the application forms, the insured was to only answer in yes or no which was also filled up by the agent in most cases, without getting any instructions from the insured. In the present case also, the court noted that the insured had not approached LIC for policy but was rather canvassed by the agent, who later himself filed out the application form and obtained the signatures. Thus, the court opined that the insured had not suppressed the fact of medical leave or admission in hospital.

The court was thus inclined to quash LIC's order.

Counsel for the Petitioner: Mr. R. Ganesh Prabhu

Counsel for the Respondent: Mr. G. Prabhu Rajadurai, Standing Counsel

Case Title: K. Ezhilarasi v The Senior Divisional Manager

Citation: 2025 LiveLaw (Mad) 7

Case No: W.P (MD). No. 20881 of 2021