DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Sanjay Sharma s/o Sh.Subhash Sharma, r/o H.No. 545, Sector 11, Panchkula.

…..Complainants

                 V E R S U S

[1] M/s Birla Sun Life Insurance Company Limited, through its Director/ Authorized Signatory, 4^th Floor, Vaman Centre, Makhwana Road, Marok Naka, Off Andheri Kurala Road, Andheri (E), Mumbai – 400 059.

[2] M/s Birla Sun Life Insurance Company Limited, through its authorized signatory/ Branch Manager, SCO No. 149-150, Sector 9-C, Madhya Marg, Chandigarh.

                      ……Opposite Parties

CORAM:   SH.P.D.GOEL                    PRESIDENT

         SH.RAJINDER SINGH GILL       MEMBER

         DR.(MRS).MADANJIT KAUR SAHOTA  MEMBER

Argued by: Sh. Krishan Singla, Counsel for Complainant.

           Sh. Nitin Thatai, Counsel for OPs.

PER P.D.GOEL, PRESIDENT

         Succinctly put, Late Mrs. Urmila Sharma, during her life time, had purchased a life Insurance Policy under “Gold Plus II Plan”, from the OPs. The Policy was issued to her on 11.09.2008, after taking into consideration the Medical Examiner’s Report dated 05.09.2008. It was averred that a sum of Rs.1.00 lac was adjusted by the OPs towards the 1^st premium, and Rs.10,000/- for the 2^nd installment. As per the policy, the sum assured was Rs.5.00 lacs, with Mr. Sanjay Sharma (Complainant - son of Mrs. Urmila Sharma) being appointee in the policy. Unfortunately, Mrs. Urmila Sharma died on 22.12.2009 and after her death; a claim was lodged by the Complainant with the OPs on 11.02.2010. It was averred that as per the Policy, the Complainant was entitled to a sum assured of Rs.5,00,000/-. However, the OPs while sending a cheque of Rs.97,518.71P, repudiated the claim of the Complainant vide letter dated 28.2.2010, on the ground of non-disclosure of some facts by the deceased. A legal notice was also served upon the OPs, but the same failed to evoke any positive result. Hence, this complaint. 

2.         Notice of the complaint was sent to OPs seeking their version of the case.

3.         The OPs No. 1 & 2 in their joint reply pleaded that on the basis of the information furnished by the deceased life assured, the proposal was processed by the OPs and thereafter, the policy in question was issued to her. It was asserted that the deceased life assured was a known case of Diabetes Mellitus & Hypertension since 10 years and was undergoing treatment for the same much prior to the inception of the policy. Since the deceased life assured concealed the vital material facts qua the pre-existing disease from the OP, therefore, the OPs had rightly repudiated the claim of the Complainant and also refunded the cash surrender value amounting to Rs.97,518.71/- vide Cheque dated 28.02.2010. All other material contentions of the complaint were controverted. Pleading that there was no deficiency in service on their part, a prayer has been made for dismissal of the complaint.

4.         Parties led evidence in support of their contentions.

5.         We have heard the learned counsel for the parties and have also perused the record.

6.         The claim in question has been repudiated by the OPs vide repudiation letter dated 28.02.2010 [Annexure C-7], stating therein, that the investigations have established that the life assured was suffering from Diabetes Mellitus, Hypertension and was undergoing treatment for the same much prior to the application for insurance. Further, the life assured also had cerebro vascular accident much prior to the application for insurance.

7.         Vide Annexure C-7, a reference has also been made to the medical information, which reads as under:-

A perusal of above medical information, which forms part of the application for insurance dated 18.8.2008 submitted by the life assured, shows that she had given answers to the aforesaid questions in negative (Annexure C-7).

8.         The OPs have placed on record Annexure OP-4 (Pg.20) with the reply, the Admission Note of Government Medical College & Hospital, Sector 32, Chandigarh. A perusal of the same makes it amply clear that the deceased life assured was a known case of Diabetes Mellitus and Hypertension since 10 years. As such, it can safely be concluded that she was undergoing treatment for the disease, referred to above, much prior to the application for insurance. Further, at page 22, which is the ICU: Admission Record, the date of admission of the life assured has been recorded as 12.12.2009.

9.         The Complainant has produced on record the Death Report [Annexure C-5], wherein vide Col. No.16, it has been stated that the cause of death of the Policy Holder was DM-II & Hypertension CVA with Seizure Disorder with sudden Cardioresp. arrest. The admission date has been recorded vide Para No. 22 as 12.12.2009 and date of death vide Para No.1 is dated 22.12.2009.    

10.       Now, it is proved on record that the policy holder had history of Diabetes Mellitus, Hypertension and cause of death was also Diabetes Mellitus, Hypertension.

11.       The learned counsel for the Complainant argued that the Policy in question was issued to the Policy Holder, after the medical examination report of the Doctor appointed by the Insurance Company vide Annexure C-2. In view of the law laid down in Senior Divisional Manager LIC Versus Satwant Kaur Sandhu, in Revision Petition No. 3138 of 2006, decided on 13.01.2011, by the Hon’ble National Commission, we do not find any merit in this argument. In the said case, it was held that the Doctor, who recorded the history and the nature of disease of the deceased, at the time of admission in the hospital, could not have thought of all these diseases, with which the deceased suffered, unless he himself told the same to the doctor while taking admission in the hospital. It was the case where the policy was issued to the Policy Holder after due medical examination by the doctors of the insurance company. It appears from the evidence on record, referred to above, that the life assured did not disclose the ailments with which she was suffering from, when she took the policy and hence, the contract of insurance is vitiated by concealment of material information.

12.       It is well settled that principle of insurance is fundamental to utmost good faith which must be observed by the contracting parties and good faith forbids either party from non- disclosure of the fact which the parties know and either of the parties have a duty to disclose all material facts in their knowledge. Reliance placed on order dated 19.05.2010, in Revision Petition No. 469 of 2006, passed by the Hon’ble National Commission in case United India Insurance Company Limited Vs. Subhash Chandra.

13.       In case Mithoolal Nayak Versus Life Insurance Corporation of India, AIR 1962 SC 814, it has been held that if a material information is withheld by the life assured, then the insurance companies have the right to repudiate the claim.  Moreover, the terms and conditions of the policy are to be strictly interpreted since the same is a contract. The insurer undertakes to indemnify the insured for the terms and conditions laid down in the contract of insurance. Since, the present claim is not payable as per the terms and conditions of the policy; there is, therefore, no hesitation in concluding that the claim was rightly repudiated by the OPs. Reliance is also placed on P.C. Chacko and Anr. Versus Chairman, Life Insurance Corporation of India & Others, 2008(1) SCC 321.

14.       Certainly, the terms and conditions of the policy are the basis of the contract of insurance and therefore, one cannot go beyond the terms and conditions of the policy. Reliance placed on M/s Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd., Civil Appeal No. 1375 of 2003, decided on 08.10.2010 by the Hon’ble Apex Court, wherein it was clearly held that in construing the terms of a contract of insurance, the words used therein must be given paramount importance and it is not open for the Court to add, delete or substitute any words. This being so, on issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy and its terms have to be strictly construed to determine the extent of liability of the insurer.

15.       As a result of above, it is held that the life assured did not disclose the illness, referred to in preceding para(s), when she took the policy; hence, the contract of insurance is vitiated by concealment of material information.

16.       Judged from any angle, we have no hesitation incoming to the conclusion that the Complainant has not been able to establish any case in his favour or prove any allegation against the OPs. As a matter of fact, it is the OPs which has been able to completely assail and rebut the allegations made by the Complainant against it by producing all relevant documents on record. Therefore, we eventually find that there is no merit, weight or substance in the present complaint and it deserves outright rejection. Hence, we dismiss the complaint. However, the respective parties shall bear their own costs.

17.       Certified copies of this order be sent to the parties free of charge. The file be consigned.

Pronounced

07.10.2011

[P.D. GOEL]

President

[Rajinder Singh Gill]

Member

[Madanjit Kaur Sahota]

Member