Haryana

StateCommission

A/1444/2017

BHAJAN LAL - Complainant(s)

Versus

BIRLA SUN LIFE INSURANCE CO. - Opp.Party(s)

RADHEY SHYAM

18 Sep 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

 

 

 

                                                          First Appeal No  :         1444 of 2017

Date of Institution:       29.11.2017

Date of Decision :        18.09.2018

 

 

Bhajan Lal son of Ram Sarup, resident of Village Bhutan Kalan, Tehsil and District Fatehabad.

                                      Appellant-Complainant

 

 

Versus

 

 

 

1.      Birla Sun Life Insurance Company Limited, Upper Side Canara Bank, G.T. Road, Fatehabad through its Branch Manager.

 

2.      Birla Sun Life Insurance Company Limited, Claims Department, G. Group Tech. Park, 6^th Floor, Casher Vadavali Ghodelpur Road, Thane, West-400 601 through its Branch Manager.

                                      Respondents-Opposite Parties

 

 

 

 

 

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri Balbir Singh, Judicial Member       

                            

 

 

 

Argued by:          Shri R.S. Sharma, Advocate for appellant

                             Shri Pawan Kumar, Advocate on behalf of Shri S.C. Thatai, Advocate for the respondents

 

                              

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

          Smt. Sunita- since deceased, wife of complainant (person insured) purchased BSLI Vision Policy from Birla Sun Life Insurance Company Limited -opposite parties (for short ‘Insurance Company’) on August 25^th, 2011. The period of insurance was from August 25^th, 2011 to January 29^th, 2015. The person insured died on December 11^th, 2011. The complainant filed claim with the Insurance Company but the same was repudiated on the ground that the person insured was suffering from Hypertension and Chronic Obstructive Pulmonary Disease (COPD) prior to the purchase of the insurance policy. The person insured did not disclose that she had pre-existing disease, so, the claim was repudiated.

2.      Aggrieved of the repudiation, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Consumer Disputes Redressal Forum, Fatehabad (for short ‘District Forum’). The District Forum dismissed the complaint vide order dated September 19^th, 2017.           

3.      Against the aforesaid, the complainant has filed the instant appeal.

4.      It is not in dispute that as per medical record drawn at Dahiya Nursing Home Private Limited dated June 08^th, 2010 (Annexure OP-3), person insured was suffering from Hypertension and Chronic Obstructive Pulmonary Disease (COPD). The complainant purchased the policy on August 25^th, 2011.  Thus, it is clear that the aforesaid medical record was prior to the purchase of the insurance policy. The treatment record has not been controverted by the complainant.  It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – uberrimae fidei, applicable to both the parties.  The rule of non-disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out facts which would materially affect the risk.  The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries.  A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.” 

5.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

6.      In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

7.      On the aforesaid facts and law enunciated, it is proved that the person insured had pre-existing disease prior to the purchase of the insurance policy, which she concealed while obtaining the insurance policy.  Thus, the complainant had no right to claim the benefits of insurance. The District Forum has rightly dismissed the complaint and as such, the appeal is also dismissed.

 

 

Announced 18.09.2018

(Balbir Singh) Judicial Member

(Nawab Singh) President

UK