Concealment of material facts on health and failure to give satisfactory explanation for long absence from duty can be reasonable grounds for a life insurance company to repudiate a policy claim, the National Consumer Disputes Redressal Commission has said.
"The LIC was justified in repudiating the claim of Bhagwati Prasad Borasi as the deceased, Poornima Borasi, had suppressed the material facts while taking the policies as well as at the time when the same were got revived," the commission headed by Justice Ashok Bhan said.
It was the stand of the LIC that the deceased was frequently suffering from certain ailments eventually leading to her death out of 'pancreatitis'.
The commission held that the deceased did not act in 'utmost good faith' and was guilty of 'fraudulent suppression of facts regarding her health'.
Borasi approached the commission seeking redressal against the order of the Bhopal State Consumer Commission which turned down his appeal in 2004 regarding repudiation of his LIC Policy.
The petitioner's wife, Poornima Borasi, had remained on leave from August 18, 1992 to May 14, 1997 almost continuously with small breaks, the commission observed.
"In the application for revival of the policy, nothing was mentioned either about the disease with which Poornima was suffering or the reason for taking leave continuously for a period of five years," the commission said.
Poornima took two LIC policies in 1995 through her brother who was also an agent of the corporation while not disclosing her state of ill-health. Later, she died in 1997.
The commission noted that Poornima did not disclose her ailment to the LIC when her policy got revived in 1997. After a few months she died.
The LIC repudiated the insurance claim on the ground of wilful suppression of material facts regarding her health. Later, Borasi moved Ujjain District Forum, which held Poornima guilty for concealment of material facts.
The commission said the deceased's family members had acted 'in collusion in order to suppress' from the LIC the existence of serious ailment in Poornima. The possibility of the prolonged ailment ultimately causing 'pancreatitis' and resulting in her death cannot be ruled out, it said.
"We are of the opinion that the deceased had deliberately concealed the fact that she had not been treated by the doctor prior to and at the time of the taking of the policies as also at the time of their revival," the commission, also comprising member B K Taimni, said, adding that the medical certificate also showed Poornima had been on medical leave on several occasions after taking the policy.