The National Consumer Disputes Redressal Commission (NCDRC) has overturned the State Consumer Disputes Redressal Commission’s order that had set aside the District Commission’s dismissal of a death claim, thereby reaffirming that the insurer bears the burden of proving non-disclosure of pre-existing ailments in life-insurance policies.
Background & Facts
The Dispute
The petitioner, Life Insurance Corporation of India (LIC), challenged two orders dated 08 July 2022 passed by the State Consumer Disputes Redressal Commission (SCDRC), Andhra Pradesh, in appeal numbers FA/565/2018 and FA/643/2018. The appeals concerned death claims under two life-insurance policies obtained on 24 March 2014 and 05 January 2015 respectively. The assured (the husband of the respondent) died on 15 February 2016. LIC repudiated the claims on 18 November 2016, alleging that the assured had suppressed material facts about pre-existing diseases.
Key Facts
- Policies were issued on 24.03.2014 and 05.01.2015.
- Assured died on 15.02.2016.
- LIC rejected the claims on 18.11.2016 on the ground of non-disclosure of pre-existing ailments.
- The District Consumer Disputes Redressal Commission (Visakhapatnam) dismissed the complaints in orders dated 24.01.2015 (CC/218/2017 and CC/220/2017).
- SCDRC set aside those dismissal orders on 08.07.2022, allowing the appeals.
- Medical-book entries of the assured show alcohol-related disease from 08.07.2010 to 03.10.2013, with endorsements on 13.07.2010, 20.05.2012, 11.06.2012, and 03.10.2013.
- The Steel Plant’s in-house medical record (Annexure P-3) was produced by LIC.
- Respondent argued that the medical-book copies were fabricated and that LIC failed to prove suppression.
Procedural History
- 24.03.2014: First policy issued.
- 05.01.2015: Second policy issued.
- 15.02.2016: Assured’s death.
- 18.11.2016: LIC repudiated death claims.
- 24.01.2015: DCDRC (Visakhapatnam) dismissed the complaints (CC/218/2017, CC/220/2017).
- 2018: Appeals filed before SCDRC (FA/565/2018 and FA/643/2018).
- 08.07.2022: SCDRC set aside DCDRC orders and allowed appeals.
- 2022: Revision petitions NC/RP/1329/2022 and NC/RP/1330/2022 filed by LIC before NCDRC.
- 27.07.2026: NCDRC delivered the present order.
Parties' Positions
- LIC (Petitioner): Asserted that the medical-book records proved pre-existing disease, that the insurer had discharged its evidentiary burden, and that the SCDRC erred by ignoring the complete docket.
- Smt Darapu Venkata Lakshmi (Respondent): Contended that LIC lacked locus to file revision petitions, that the medical records were photocopies and possibly fabricated, and that the insurer failed to prove suppression of facts.
Relief Sought
LIC sought a declaration that the revision petitions be allowed, the SCDRC orders dated 08 July 2022 be set aside, and the District Commission’s dismissal of the complaints be restored.
