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Illegal Repudiation of Insurance Claim Attracts Punitive Damages
One Mr. Vithaldas Parmar of Rajkot died of a heart attack. LIC repudiated the claim of the widow Mrs. Manjulaben on the grounds that Vithaldas was a man of intemperate habits and that he had hidden material facts. He was treated by Government Hospital at Rajkot and he died at the Hospital.
One Mr. Vithaldas Parmar of Rajkot died of a heart attack. LIC repudiated the claim of the widow Mrs. Manjulaben on the grounds that Vithaldas was a man of intemperate habits and that he had hidden material facts.
He was treated by Government Hospital at Rajkot and he died at the Hospital.
Ordinarily speaking, death certificate given by the last attending doctor is the relevant document. LIC did not choose to use the said certificate. They relied upon the certificate of Ayurvedic practitioner who had earlier treated him.
The Vaidya who was treating him earlier for cough and cold and congestion in the lungs instructed him not to eat Bananas and Pears since it may lead to further congestion.
Vaidya deposed that the deceased Vithaldas Parmar was eating bananas and pears against his instructions and therefore he was a man of intemperate habit. This phrase normally is used for an alcoholic.
LIC relied on a deposition of Vaidya that deceased was a man of intemperate habit leading to his death and hence claim be rejected.
However State Commission did not award punitive damages for emotional distress caused to Manjulaben. Even though CERC won the case, we took the matter to the National Commission for awarding punitive damages. They awarded Rs. 20,000/ – punitive damages. It was the first case decided by Consumer Court.
CERC relied upon American judgments where when severe emotional distress was caused to the heirs of the deceased policyholder by the conduct of the insurance company in rejecting the claim, by and large, 5 times the sum assured was awarded as punitive damages. It may be noted that questions of facts and quantum of damages even in Civil Court tortuous liability cases are decided by the jury.
Appellate Court does not interfere into the decision of the jury on questions of facts and quantum of damages unless and until insurance company is able to establish before the Appellate Court that jury was guided by “passion and prejudice” against the insurance companies.