1.      This consumer complaint under section 21(a)(i) of the Consumer Protection Act, 1986 (in short, the ‘Act’) is filed alleging deficiency in service in repudiation of the claim filed by the complainant as her husband’s nominee in a Group Credit Protection Plus Insurance policy issued by the opposite party.

2.      The relevant facts of the case according to the petitioner are that the said policy dated 22.06.2012 was for a life cover of Rs 1,00,00,000/- against a premium of Rs 6,96,519.64. The deceased life assured (DLA), Dr P. Phanindranandha Reddy died a sudden but natural death on 10.11.2013. The complainant approached the opposite party for settlement of claim in December 2013 but was informed vide letter dated 14.04.2014 that the claim was repudiated on the ground that pre-existing diseases such as Type 2 Diabetes Mellitus, Hypertension and Obesity were not disclosed  in the proposal form dated 19.06.2012. The complainant’s representation before the Claims Review Committee was also disallowed on 17.06.2014. The complainant is before this Commission with the following prayer:

i.        Direct the Respondent to pay the entire insured sum of one crore rupees to the Complainant along with an interest at the rate of 15% from the date when the claim was first made by the Complainant.

ii.       Direct the Respondent to pay to the Complainant twenty lakh rupees towards compensation for mental harassment and agony.

iii.      Direct the Respondent to pay to the Complainant two lakhs rupees towards litigation costs

iv.      Pass such other order as this Hon’ble Commission deems fit and proper.

3.     The opposite party resisted the complaint by way of written statement.       It was stated that the DLA was a doctor who was aware of his pre-existing illnesses and deliberately withheld their declaration in the proposal/enrolment form while obtaining the insurance policy. As an insurance policy is a contract of uberrima fides or utmost good faith, suppression of material information rendered the policy void ab-initio and was accordingly repudiated. The ‘Declaration of Good Health’ in the enrolment form had declared the DLA as not suffering from pre-existing illnesses such as diabetes, high blood pressure, heart disease or being on medication for the same. It is stated that the non disclosure misled the opposite party who did not undertake detailed investigations before considering the issuance of the policy. The fact of the DLA’s death was conveyed by the complainant on 29.11.2013 and the cause of death mentioned as heart attack on 11.11.2013 at Vijayawada and was certified by Dr G. Sunil Chowdary. As per investigations by the investigator appointed by the opposite party, the death occurred in Hyderabad and the cremation in Vijayawada. The DLA was reported by Dr Sunil Chowdary to have been suffering from diabetes, hypertension and other diseases such as high cholesterol and dyslipidaemic for the last 3 years prior to his death as also certified by him vide letter dated 15.03.2014. Another Dr GVR Murthi had provided prescriptions for the LA for hypertension and diabetes and vide letter dated 17.12.2013 and confirmed treating him since 2011. Pathology reports from Royal Diagnostics, Vijayawada vide letter dated 17.12.2013 enclosing reports dated 06.07. 2011, 08.03.2012 and 20.11.2012 indicated high triglycerides levels. Another doctor, Dr P. Damodar Reddy had on 18.03.2014 certified that the LA was overweight and diabetic since 3 years. As the DLA died due to cardiac arrest, contributing illnesses for which are abnormally high blood sugar levels and hypertension leading to ischemic heart disease the suppression of these facts was significant and therefore the rejection of the claim was justified. The opposite party’s internal Claims Review Committee also rejected the representation of the complainant for this reason. Reliance is placed on the judgments of the Hon’ble Supreme Court in LIC Vs. Asha Goel & Ors. 2001 (1) SCC 162, LIC Vs. GM Channabasamma, 1991 (1) SCC 357 and of this Commission in Sr. Divisional Manager, LIC Vs. Gangamma & Anr. III (2002) CPJ 56 (NC) wherein repudiation of claim on violation of utmost good faith has been upheld. It is also contended by the opposite party that its consent to the contract was not ‘free consent’ but by suppression of material facts and, therefore, the contract of insurance was void as held by the Hon’ble Supreme Court in Mithoolal Nayak Vs. LIC, AIR 1962 SC 814.

4.      Both parties led their evidence on affidavit and filed their written arguments. I have heard the learned counsel for both the parties and carefully considered the material on record.

5.      On behalf of the complainant it was argued that there was no pre risk health check up before the issuance of the policy. The DLA was an active individual in addition to a demanding medical practice. The rejection of the claim on grounds of non-disclosure of pre-existing illness is contested by the complainant as being fabricated and false. It is submitted that the DLA was not suffering from any of the diseases alleged and that the statements of the doctors produced are denied as being fabricated as they were not treating the DLA. It is denied that Dr G. Sunil Chowdary was the Family Doctor. It is also stated that both he and Dr P. Damodar Reddy are not General Physicians or cardiologists or endocrinologists but are anaesthesiologists who have not even treated the DLA at any occasion. Their reports obtained by the opposite party’s investigator are alleged to be fabricated and false. The reports of the diagnostic center are also contested since no reports related to fasting plasma glucose and HbA1 have been produced. It is stated that the DLA was himself a doctor who, if he was suffering from hypertension and/or diabetes, would not have subjected himself to be treated by anaesthesiologist instead of a Heart Specialist, General Physician or Endocrinologist. It is also submitted that the DLA had  policies with other insurance companies which were settled. Therefore it is contended that the repudiation of the claim is deficiency in service for which the reliefs sought be allowed.

6.      Per contra, it is argued on behalf of the opposite party that although there was no medical examination conducted of the DLA prior to the policy being approved, the non-disclosure of any health condition adversely prejudices the decision of the insurance company relating to acceptance of risk. The case was investigated through an investigator, S. Nagendra Kumar, since the LA expired within 1 year 5 months of the policy and the claim was repudiated on the basis of his report dated 19.03.2014. The DLA as a doctor himself, wilfully withheld the disclosure of material facts in the proposal/enrolment form which would have necessitated detailed investigation and extensive tests. It is contended that the DLA had a medical history of diabetes, hypertension and other diseases as per statements and prescriptions of doctors collected by the investigator of the opposite party. The investigator’s finding was that the DLA expired in Hyderabad and not Vijayawada where he was cremated. The investigator had collected details from different doctors and paramedical technicians to conclude that the DLA was under treatment. As per Hon’ble Supreme Court’s judgment in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., 2009 (8) SCC 316 and this Commission in Smt. Shakuntala Vs. Life Indurance Corporation of India, III (2014) CPJ 517 (NC) disclosure of information in the proposal form is not to be determined by the proposer. It is stated that under Regulation 2(1)(d) of the IRDA (Protection of Policy Holders Interest) and section 45 of the Insurance Act, 1938, information relating to medical history constituted material facts which must be disclosed and if fraudulently suppressed by the policy holder would entitle the insurer to repudiate his liability under the contract of insurance. As the conditions of a valid contract were never fulfilled, the policy was void ab-initio  and was rightly repudiated.

7.      From the foregoing it is manifest that the crux of the issue is whether the policy was obtained on the basis of suppression of material facts. Admittedly, the opposite party did not insist on detailed medical tests and examination of the DLA. Its claim that there was wilful suppression of material facts is based upon investigations by the investigator appointed by the opposite party. The investigations reveal that the DLA who was himself a doctor was under treatment for hypertension, diabetes and dyslipidaemia by two doctors who were anaesthesiologists. The prescriptions and letters issued by them are disputed by the complainant as being fabricated and false. It is also contested that a practising doctor would have sought medical advice from specialists in cardiology, endocrinology or a general physician rather than anaesthesiologists. It is also contested by the complainant that the prescriptions produced are fabricated as these are not retained by the prescribing doctors, although it is contended by the opposite party that these were copies retained by the doctor. The investigator has listed in his report a large list of persons he interacted with in the course of his investigations. However, there is no affidavit filed as part of the evidence by the opposite party in support of the statements and/or inferences drawn by the investigator. No document or basis has been produced to support the conclusion that the DLA expired in Hyderabad and not Vijayawada or when and how the body was brought to Vijayawada where the cremation took place the same day. The reason for suspecting the death in Hyderabad which is stated to be a ‘mystery’ is not supported by any documentary evidence too. The complainant has contended that there was no interview conducted with her by the said investigator in the course of his investigations and therefore there was no opportunity to provide her version or to clarify any issues. The report of the investigator is therefore a document which is called into question by the complainant on several grounds which have not been answered by the opposite party which has relied upon it to conclude that there was a breach of uberrima fides rendering the policy itself as a contract void, ab initio. The veracity of the surveyor’s report is therefore suspect along with its conclusions.

8.      The opposite party has mainly emphasized upon the lack of full disclosure of material facts at the time of the policy being taken. On this issue, it is notable that it was also open for the opposite party to have conducted necessary tests and investigations since the risk cover was a substantial amount. Admittedly, it did not do so. Therefore, seeking protection under Regulation 2(1)(d) of IRDA’s Protection of Policy Holders Interest regulations or section 45 of the Insurance Act, 1938 at this stage is of no avail to them. Hypertension, obesity and diabetes are lifestyle diseases which can occur at any stage and need not be life threatening.  The opposite party has not proven by evidence that the test parameters of the DLA were abnormally high as to trigger a life threatening cardiac event. In any case, the DLA was due to cardiac arrest which was a covered risk. There are many cases of death by cardiac arrest in middle aged persons which, in the present case, is sought to be ascribed to pre-existing (lifestyle) diseases. In the absence of any cogent proof based on documentary evidence supported by affidavit, it is not possible to accept the conclusion of the opposite party in the instant case that the DLA had pre-existing illnesses which were wilfully concealed at the time of obtaining the policy. In this view of the matter, the argument that the principle of utmost good faith was violated rendering the policy void, ab initio does not sustain. For these reasons, the complaint is liable to succeed.

9.      In the result, the complaint is found to have merit and is accordingly partly allowed. The opposite party is directed to pay the complaint the insured sum of Rs 1,00,00,000/- along with interest @ 12% per annum from the date of submission of the claim within a period of 8 weeks failing which the same shall be paid with interest @ 15% p.a. till realization.

10.    The complaint stands disposed of with these directions.