CONSUMER AWARENESS
HC ruling on insurance claim
Chennai: Holding that non-disclosure of certain facts in the proposal for insurance coverage will not amount to suppression of material facts, a division bench of the Madras high Court upheld the orders of a single judge directing the Life Insurance Corporation 
(LIC) of India to pay Rs 5 lakh to a woman.
J Chezhian (32), an engineer and doing business, had taken a life insurance policy for Rs 10 lakh and the policy, commencing from January 28, 2003, was issued on February 10, 2003. He died of a heart attack on February 21, 2003. When his wife C Hemalatha claimed the insured amount, the LIC contended that it was a case of suppression of material facts.
Contending that it was just a case of suppression of facts, the Ombudsman ordered the payment of Rs 5 lakh to Hemalatha. However, the LIC moved the Madras HC and a single judge in June 2009, upheld the orders of the ombudsman. Hence the present appeal from the LIC.
The LIC submitted that Chezhian met with an accident while riding a two-wheeler and suffered an injury on June 24, 2001. Chezhian, who used to drink alcohol, was under the influence of alcohol at the time of accident. He was also a diabetic and a known smoker. All these facts were not mentioned in the proposal for insurance.
Against the column from dealing with all these factors, he had stated ‘No’. This was a clear case of suppression of material facts and hence, his wife was not entitled to any relief, the LIC contended.
Rejecting the contentions, First Bench comprising chief Justice H L Gokhale and Justice N Paul Vasanthkumar observed that the 2001 accident did not appear to be serious as Chezhian was discharged on the same day. As far as the ailment of diabetes was concerned, it appeared that he was under treatment for three months prior to the date of his death. The deceased was just 32 years old. Surely nobody expected a person of that age would die of a heart attack.
This would not come under the category of suppression of material facts. "we do not think that this is a case where we can fault the judgment of the Ombudsman and that of the single judge," the Bench said and directed the LIC to disburse the amount within two months to the wife.
(LIC) of India to pay Rs 5 lakh to a woman.J Chezhian (32), an engineer and doing business, had taken a life insurance policy for Rs 10 lakh and the policy, commencing from January 28, 2003, was issued on February 10, 2003. He died of a heart attack on February 21, 2003. When his wife C Hemalatha claimed the insured amount, the LIC contended that it was a case of suppression of material facts.
Contending that it was just a case of suppression of facts, the Ombudsman ordered the payment of Rs 5 lakh to Hemalatha. However, the LIC moved the Madras HC and a single judge in June 2009, upheld the orders of the ombudsman. Hence the present appeal from the LIC.
The LIC submitted that Chezhian met with an accident while riding a two-wheeler and suffered an injury on June 24, 2001. Chezhian, who used to drink alcohol, was under the influence of alcohol at the time of accident. He was also a diabetic and a known smoker. All these facts were not mentioned in the proposal for insurance.
Against the column from dealing with all these factors, he had stated ‘No’. This was a clear case of suppression of material facts and hence, his wife was not entitled to any relief, the LIC contended.
Rejecting the contentions, First Bench comprising chief Justice H L Gokhale and Justice N Paul Vasanthkumar observed that the 2001 accident did not appear to be serious as Chezhian was discharged on the same day. As far as the ailment of diabetes was concerned, it appeared that he was under treatment for three months prior to the date of his death. The deceased was just 32 years old. Surely nobody expected a person of that age would die of a heart attack.
This would not come under the category of suppression of material facts. "we do not think that this is a case where we can fault the judgment of the Ombudsman and that of the single judge," the Bench said and directed the LIC to disburse the amount within two months to the wife.
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