APPEARED AT THE TIME OF ARGUMENTS

PRONOUNCED ON :  7^th SEPTEMBER 2017

O R D E R

PER DR. B.C. GUPTA, MEMBER

          This first appeal has been filed under section 19 read with section 21(a)(ii) of the Consumer Protection Act, 1986 challenging the impugned order dated 25.08.2014, passed by the Punjab State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in consumer complaint No. 5/2011, vide which, the said complaint against the respondent, Bajaj Allianz Life Insurance Company for payment of the insured amount was dismissed on the ground that the deceased husband of the complainant had concealed material information about his health condition at the time of obtaining the insurance policy in question. 

2.       Briefly stated, the facts of the case are that the appellant/complainant Sunita Goyal stated in her consumer complaint No. 5/2011 that her late husband Jai Bhagwan obtained a life insurance policy from the Opposite party (OP) Bajaj Allianz Life Insurance Company Limited for a sum assured of ₹50 lakh on 27.03.2007, for which the annual premium payable was ₹1 lakh.  A detailed medical examination was got conducted on the policy holder by the OPs, in which the insured was found to be IN a fit condition of health.  Two real brothers of the deceased also obtained similar policies on the same date and underwent the requisite medical tests.  The complainant was a nominee in the policy taken by her husband.  The insured deposited the instalment of premium regularly till his death which took place on 30.03.2010.  The complainant filed the insurance claim with the opposite party alongwith all requisite documents for release of the sum assured and payment of other due benefits by the OPs.  After the exchange of some correspondence between the complainant and the insurance company, a repudiation letter dated 21.09.2010 was received by the complainant from the OP, in which it was stated that the deceased had history of diabetes mellitus (DM) since 15 years and was under hospitalisation/treatment for acute renal failure (ARF) since 2006.  The OP insurance company stated that these facts, known to the deceased, had not been disclosed in the proposal form for taking the policy and hence, there was suppression of material information on the part of the deceased insured.  The State Commission, after taking into account the averments made by both the parties, concluded that the OP Insurance Company were justified in repudiating the claim of the complainant on the ground that there was suppression of material information and concealment of serious diseases by the insured at the time of taking the policy.  The consumer complaint was ordered to be dismissed.  Being aggrieved against the order of the State Commission, the complainant is before this Commission by way of the present first appeal.

3.       There is a delay of 224 days in filing the present appeal.  An application for condonation of delay has been filed by the appellant, in which it is stated that the complainant is a resident of Jalandhar town in Punjab and that she could not visit Delhi because of her knee problem and hence, could not contact any counsel for filing the said appeal.  She had to visit Chandigarh also to collect the necessary papers.  The delay in filing the appeal was neither intentional nor deliberate, but it was due to the reasons beyond her control. 

4.       During arguments before us, the learned counsel for the appellant stated that the appellant had filed medical reports in support of her contention that she could not file the appeal in time, because of her health problems.  The learned counsel has drawn attention to an order passed by the Hon’ble Supreme Court in “N. Balakrishnan vs. M. Krishnamurthy” [VII (1998) SLT 334], saying that the primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice.  The delay in filing the appeal should, therefore, be condoned.  The learned counsel further stated that the husband of the appellant alongwith his two brothers had obtained the insurance policies in question, for which they were subjected to requisite medical tests by the insurance company, in which nothing adverse was found against them.  The husband of the complainant had also paid premium for about four years.  His brothers had been paying the premium regularly.  The learned counsel argued at length, saying that the deceased was suffering from “acute renal failure” (ARF) and not “chronic renal failure” (CRF).  The learned counsel has given references to medical literature and tried to draw a distinction between ARF & CRF.  The learned counsel argued that the ARF occurs suddenly, but it is reversible.  However, the CRF happens gradually and its incidence may not be known till there is about 75% damage to the kidneys.  The learned counsel stated that even if the deceased had undergone treatment for the ARF, he would have been fully cured by the time, the Insurance Policy was obtained and proposal form for the same was filled.  In this way, there had been no suppression of material facts by the deceased insured.  The learned counsel has referred to the record from the Kidney Hospital, Jalandhar, saying that the deceased was admitted in the said hospital on 28.04.2006, but he was discharged on the very next day, i.e., 29.04.2006.  In the consultants’ notes in that hospital recorded on 28.04.2006, he was stated to have been suffering from ARF.  Keeping all these facts into consideration, the allegation of suppression of material information was not proved against the deceased insured. 

5.       Per contra, the learned counsel for the respondent/Insurance Company argued that no valid grounds had been mentioned in the application for condonation of delay, based upon which, the huge delay of 224 days could be condoned.  The medical documents produced by the complainant in her favour are not relevant because she was never advised any bed-rest or immobilisation etc.  The learned counsel has drawn attention to an order passed by the Hon’ble Supreme Court in “Post Master General & Ors. vs. Living Media India Limited & Anr. [(2012) 3 SCC 563]”, saying that the condonation of delay should be made only, if there is any valid explanation for doing the same.

6.       The learned counsel further argued that a simple perusal of the proposal form for obtaining the insurance policy indicated that the deceased had given answers as ‘No’ to all the questions mentioned in the proposal form.  The deceased had categorically stated that he had not been treated for any disease or disorder in the past.  It was the duty of the insured to have disclosed about the treatment taken for the ARF and also for other problems like diabetes mellitus and hypertension etc.  The learned counsel argued that vide their letter dated 18.08.2010, they had asked for the case-sheets and treatment details of 2006 related to CRF from the complainant.  It was evident from the medical record of the Kidney Hospital pertaining to the year 2006 as well as 2009 that the insured was suffering from ARF.  The learned counsel has further drawn attention to copy of consultants’ notes made on 08.07.2009 in the Kidney Hospital, where it was stated that the insured was diagnosed as CRF in the year 2006.  It is also stated that he had been suffering from diabetes mellitus for the last 23 years and had hypertension for the last 4 – 5 years.  In the medical attendant certificate given by Dr. Ajay Marwah, he had been shown suffering from diabetes mellitus and hypertension besides other ailments.  In the certificate of hospital treatment given by Kidney Hospital as well, there is mention of these diseases.  It was evident, therefore, that there had been suppression of material information from the insurance company on the part of the complainant.  The learned counsel argued that ARF and CRF were interchangeable terms.  It was wrong to suggest, therefore, that the patient had been cured from kidney ailment at the time of filling the proposal form.  The learned counsel has drawn attention to the order passed by this Commission in “Life Insurance Corporation of India vs. Mamta [I (2015) CPJ 670 (NC)]”, saying that concealment of material fact regarding previous ailment by the life assured was fatal and the Insurance Company was well within their rights to repudiate the claim.  The learned counsel has also drawn attention to order passed by the Hon’ble Supreme Court in “Mithoolal Nayak vs. Life Insurance Corporation of India [AIR 1962 SC 814]”, “Life Insurance Corporation of India & Ors. vs. Asha Goel (Smt.) & Anr. [(2001) 2 SCC 160]”, “Satwant Kaur Sandhu vs. New India Assurance Co. Ltd. [(2009) 8 SCC 316]”, “United India Insurance Co. Ltd. vs. M.K.J. Corporation [(1996) 6 SCC 428]” in support of his arguments.  Referring to Section 45 of the Insurance Act 1938, the learned counsel says that the suppression of material information even after the expiry of two years of taking the policy could not be condoned. 

7.       I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

8.       The first issue for consideration in the matter is with regard to the delay in filing the appeal in question.  There is a delay of 224 days in filing the appeal.  The appellant has not been able to advance any cogent and convincing reason in the application for condonation of delay or during arguments before this Commission which may justify the condonation of such delay.  Simply saying that time was spent in collecting papers from Chandigarh and contacting a counsel at Delhi, does not provide satisfactory explanation for condonation of such delay.  There is no valid ground made out, therefore, for condonation of delay of 224 days and appeal deserves to be dismissed on this ground alone.

9.       The next issue that merits consideration is whether there has been suppression of material information from the Insurance Company at the time of filling the proposal form by the deceased insured.  As stated earlier, a perusal of the proposal form for life insurance indicates that against clause 14 with the title, “Have you ever been treated or currently under treatment for any of the following conditions”, the insured had given answers as, “No” to all the questions.  From the material available on record, however, it is clear that the insured did obtain medical treatment and for that purpose, he was also admitted in the Kidney Hospital.  It was, therefore, the duty of the insured to make a truthful disclosure about his previous or current health condition at the time of filling the proposal form.  The medical notes recorded by the Kidney Hospital on 08.07.2009 bring out clearly that the insured was suffering from diabetes mellitus for 23 years and hypertension for the last 4 – 5 years and that he was diagnosed for CRF in the year 2006.  It goes without saying therefore, that the insured should have faithfully disclosed information about all these diseases, while filling the proposal form.

10.     Coming to the arguments advanced by the learned counsel for the appellant about the Acute Renal Failure (ARF) versus the Chronic Renal Failure (CRF), the learned counsel has tried to explain that the deceased was suffering from ARF and not CRF and that the ARF was a reversible phenomena.  Even if this contention of the learned counsel of the complainant is believed, it is clearly made out that the factum of taking treatment for ARF etc. should have been disclosed by the complainant’s husband while filling the proposal form, in the absence of which, it has to be presumed that there was concealment of information from the Insurance Company on his part.

11.     The next issue for consideration in the matter is the applicability of section 45 of the Insurance Act, 1938.  The said section states as follows:-

“No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry calf two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose:

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”

12.     The matter has been examined in a number of judgments passed by the Hon’ble Supreme Court from time to time.  In “P.C. Chacko & Anr. vs. Chairman, Life Insurance Corporation of India & Ors. [III (2008) CPJ 78 (SC)]”, it has been stated as follows:-

“13. There are three conditions for application of Second Part of Section 45 of the Insurance Act which are:

“(a)  the statement must be on a material matter or must suppress facts which it was material to disclose;

(b)    the suppression must be fraudulently made by the policy-holder; and

(c)    the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.

[See Mithoolal Nayak (supra]”

13.     It is clear from the facts and circumstances of the case that suffering from diabetes, hypertension etc. and getting treatment for ARF was a material fact which must be within the knowledge of the deceased policy holder.  It was, therefore, the bound duty of the deceased to have disclosed these facts and for his failure to do so, he cannot take advantage of section 45 of Insurance Act, on the ground that the death took place after two years of obtaining the policy in question.  Even after the lapse of two years of taking the policy, it was necessary to disclose information about the material facts before the Insurance Company. 

14.     It is a settled legal preposition that a contract of insurance is a contract of good faith ‘uberrima fides’.  As stated by the Hon’ble Supreme Court in “Life Insurance Corporation of India & Ors. vs. Asha Goel (Smt.) & Anr.” (supra), every material fact must be disclosed otherwise, there is a good ground for rescission of the contract. 

15.       Based on the discussion above, I do not find any illegality, irregularity or jurisdictional error in the order passed by the State Commission, by which the consumer complaint has been ordered to be dismissed on grounds of non-disclosure of material facts about his health condition by the insured.  More so, there is no valid justification for the condonation of huge delay of 224 days in filing the present appeal.  This first appeal is, therefore, ordered to be dismissed both on grounds of limitation and merits and the order passed by the State Commission is upheld.  There shall be no order as to costs.