ORDER

SRI.H.R. SRINIVAS.  PRESIDENT

1.     This is the Complaint filed by the Complainant against the Opposite Parties (herein referred to as OPs) under section 12 of the Consumer Protection Act, 1986 for the deficiency in service in repudiating the insurance claim made by the complainant and for payment of the insured amount of Rs.8,50,000/- along with interest at 18% per annum and for  such other reliefs as the Hon’ble District Commission deems fit.

2.     The brief facts of the complaint are that; the complainant  is the nominee of the insurance obtained by her husband Mohammed Inayathulla. The insurance was obtained on 27.07.2018 in name of Mohammed Inayathulla by paying premium Rs.8,573.50. The said Md. Inayathulla died on 31.10.2018 the same was intimated to Op and the claim was made in respect of the insurance policy bearing No. SLMDWLA0191630. The same was repudiated by the OP.  The act of OP amounts to negligence, deficiency in service which has put the complainant deprivation of her right, subjected her to harassment, mental agony. She issued a legal notice in that respect and, inspite of it, OP did not bother to respond and pay the amount. Hence the complaint.

3.     Upon the service of notice, OP appeared before the commission through its advocate and filed the version admitting the issue of the insurance policy for Rs.6,50,000/- and also the intimation of death of the insured and also claim made by the complainant.  It repudiated the claim of the complainant on the ground that the insured was suffering from pre-existing diseases and has suppressed the health condition and also the treatment taken previously.  He was a diabetic patient suffering from diabetes and “pedal edema feet” prior to issuance of policy in the year of 2014 from St. Johns hospital and he was also taking treatment from Sri Jayadeva Institute of Cardio Science in the year 2015 for Pedal Edema feet, suffering from Dyspnea, and after investigation it was found that he died due to Sepsis with septic shock and cardio shock, acute kidney injury, diabetes mellitus . Hence the request of the complaint for honouring the policy repudiated for not providing details of the medical history and also suppressing the facts in violation of the principals of utmost good faith.

4.     It was contended that at the time of obtaining the policy the policy holder was informed the effect of suppression of material fact and also the terms and conditions under which the policy was issued and the insured understood the terms and conditions of the insurance policy. Complainant has not come with clean hands and there is no deficiency of service on the part of OP company and prayed the commission to dismiss the complaint.

5.     In order to prove the case, both parties have filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Parties?

2) Whether the complainant is entitled to the relief prayed for in the complaint?

6.     Our answers to the above points are:-

POINT NO.1  & 2:    In the Negative

                                For the following.

REASONS

POINT No.1 & 2:-

7.     Upon perusing the entire documents, version and the complaint, it becomes clear that the complainant’s husband obtained insurance policy from the OP by paying premium of Rs.8,573.50 as per Ex. P1. The sum assured as per the said policy was for Rs.6,50,000/- and the commencement of the policy, on 27.07.2018 and the termination of the policy to be on 26.07.2021  This insurance is obtained by the insured in respect of the loan he borrowed from Equitas Small Finance Bank Limited under its master policy holder.  Ex P2 is the death certificate of insured Mohammed Inaythulla. Exchange of legal notice is not in dispute.

8.     It is the contention of the complainant that OP after the intimation of the death of the husband of the complainant, when the claim was made, repudiated the same on the ground that the insurer has suppressed the material facts in not disclosing the earlier medical condition. Whereas, he was not having any medical problems and that she is entitle for the policy amount.

9.     On the other hand, it is the specific contention of the OP, it repudiated the claim of the complainant as after investigation, it was established that the life assured was suffering from ‘diabetes mellitus’ and having ‘pedal edema feet’ prior to issuance of the insurance policy and he has stated no to the question regarding his health details such as:

        “Health Details of Life to be Assured:

“1. Have you ever suffered or are currently suffering from (a) Chest pain or heart attack or any other heart disease (b) Cancer, tumour growth or cyst of any kind (c) Stroke, Paralysis, Epilepsy any psychiatric/ mental disorder, disorder of brain/nervous system or any kind of physical disabilities (d) Asthma, tuberculosis or lung disorder (e) Disease or disorder of muscles, bones or joint, arthritis or blood disorder (anaemia) or any endocrine disorder (f)Disease of the kidney, digestive system (stomach, pancreas, gall bladder, intestine)

6. Are you taking any medication or has a doctor ever attended to you for any conditions, diseases or impairment not mentioned above (except for cough or cold):”

10.   Even the further request for review the decision of repudiation was also rejected by the review committee.  OP has also produced the investigation report conducted by it after the claim was made wherein, it is found that the insured was diagnosed to have IHD in 2015 as per Jayadeva hospital document. Further he was having the complaints of dyspnea pedal edema, T2DM by Jayadeva Hospital on 16.12.2015 and he refused admission at that time.  Before that, the complainant had to taken treatment from St.Johns hospital on 21.04.2014 and has produced the prescriptions in that regard.  OP has also produced the cause of the death wherein it is mentioned that the complainant’s husband died due to Sebsis with septic shock, with cardiac shock, and communal acquainted pneumonia  and diabetes mellitus, acute kidney injury.  Ex R5 is the discharge record/death summary wherein apart from the diagnosis mentioned above for the death of the husband of the complainant, the comorbidites mentioned as Mohammed Inayathulla was a heavy smokers since 20 to 30 years, type 2 diabetes since 15 years on insulin, history of hospital admission 4 years back at SJMCH with complaining of breathlessness (plural perfusion), treated medically details not available. History of palpitation, chest discomfort since 2014, treated at Jayadeva Hospital, ECG –ST Alivation.

11.   When this is taken into consideration and when the complainant husband obtained insurance on 27.07.2018 and died on 31.08.2018 it can be easily gathered that knowingfully well that he was having a such a medical conditions, had suppressed his medical conditions and obtained insurance policy which is much against to the principal of uberimmafides. 

12.   Counsel for OP has relied on the decisions reported in (2019) 6 SCC -175 – “Reliance Life Insurance Company Limited and another Vs. RekhaBen NareshBhai Rathod” and Civil Appeal No. 3397/2020 between: Manager, Bajaj Alliance Life Insurance Co. Vs Balbeer Kaur decided by Hon’ble Supreme Court of India and contended that, on the said decision the complaint is to be dismissed. and We have gone through the said decisions in detail in Para 30 and 31 of the 1^st decision it is mentioned as:

 “30. It is standard practice for the insurer to sent out in the application  a series of specific  questions regarding the applicant’s heath history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.

31. The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur “there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance”. Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.”

And in Para 13 of the 2^nd decision it is held as :

“13. The medical records  which have been obtained during the course of the investigation clearly indicate that the deceased was suffering from a serious pre-existing medical condition which was not disclosed to the insurer. In fact, the deceased was hospitalized to undergo treatment for such condition in proximity to the date of his death, which was also not disclosed in spite of the specific queries relating to any ailment, hospitalization or treatment undergone by the proposer in column 22 of the policy proposal form. We are, therefore, of the view that the judgment of the NCDRC in the present case does not lay down the correct principle of law and would have to be set aside. We order accordingly.”

13.   When this is taken in to consideration, in this case also, the husband of the complainant did not disclose his earlier ailments and medical conditions at the time of obtaining the insurance policy. Had he disclosed the same to the  insurance company, it would have evaluated the risk involved in providing the policy and would have either levied higher premium or refused to provide the insurance.  Hence it is a material fact which the husband of the complainant suppressed and hence under the terms and conditions of the policy, suppression of the material facts to the insurer has right to avoid the contract and repudiate the claim. Hence we see no deficiency in service or unfair trade practice in OP repudiating the claim and according to us it as per the provisions of Section 45 of the Insurance Act. Hence we answer POINT NO.1 AND 2 IN THE NEGATIVE and pass the following:

ORDER

1. The complaint is hereby dismissed. Parties to bear their own costs.

2. Send a copy of this order to both parties free of cost.

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this day the 19^th day of April 2021)

MEMBER                        PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Insurance policy  

Ex P2: Death certificate of complainant husband

Ex. P3: Copy of the legal notice

Ex P4: Copy of the document issued by St.Johns Hospital

Ex P5: Copy of the discharge summary.

Ex P6: Copy of the death certificate.

Ex P7: Copy of the Group claim form

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Sri Nagaraj. M, Associate Manager of OP.

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copy of the Member enrollment certificate.

Ex R2: Copy of the Member certificate of Insurance

Ex R3: Copy of the  Investigation Report.

Ex R4: Copy of the Medical report of St.Johns Hospital

Ex R5: Copy of the Medical report of Jayadeva Hospital

Ex R6: Copy of the Repudiation letter

MEMBER                                PRESIDENT

RAK*