Haryana

StateCommission

A/789/2016

BHARPAL - Complainant(s)

Versus

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

ABHIMANYU BATRA

24 Jan 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :    789 of 2016

Date of Institution:    31.08.2016

Date of Decision :     24.01.2017

 

Smt. Bharpal w/o Sh. Kitab Singh, Resident of Village Roop Garh, Tehsil and District Jind.

                                      Appellant-Complainant

Versus

1.      Birla Sun Life Insurance Company Limited, Scheme No.6, Gandhi Nagar, Jind, through its Branch Manager.

2.      Birla Sun Life Insurance, One India Bulls Centre, Tower-I, 16^th Floor,, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai-400013.

                                      Respondents-Opposite Parties

 

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

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member   

 

Argued by:          Shri Abhimanyu Batra, Advocate for appellant.

                             Shri S.C. Thatai, Advocate for respondents.

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          This appeal has been preferred by complainant against the order dated August 29^th, 2016 passed by District Consumer Disputes Redressal Forum, Jind (for short ‘the District Forum’) whereby complaint was dismissed.

2.                Rajender (since deceased)-son of Smt. Bharpal-complainant (appellant herein) was insured with Birla Sun Life Insurance Company Limited (for short ‘the Insurance Company’)-Opposite Parties/respondents for Rs.5.00 lacs. The policy commenced from May 10^th, 2012. The insured died on 5^th December, 2012.  Claim being filed, the Insurance Company repudiated the same vide letter Exhibit C-10 stating that the insured was suffering from Diabetic Neuropathy with Quadriparesis and remained admitted in ‘Shah Satnam Ji Speciality Hospitals, Sirsa from 10.02.2012 to 15.02.2012, that is, prior to purchase of the policy but this fact was concealed by him in the proposal form (Exhibit OP-1). Since, the insured made false statement and obtained the policy by playing fraud, the Insurance Company was not liable to pay any amount as per terms and conditions of the policy.  Hence, complaint under Section 12 of the Consumer Protection Act, 1986 was filed before the District Forum.

3.                The Insurance Company-opposite parties contested the complaint by filing written version and while reiterating the fact stated in the repudiation letter, prayed for dismissal of the complaint.

4.                After evaluating the pleadings and evidence of the parties, the District Forum dismissed the complaint.

5.                Indisputably, the insured had purchased the policy on May 10^th, 2012 by submitting the Proposal Form (Exhibit OP-1) wherein he gave answers to Question No.11 in negative. Question No.11 (E) and the answer thereto is reproduced as under:-

Question No. 11(E)     Have you ever been diagnosed with or treated/consulted for diabetes or sugar in urine, high or low blood pressure, chest pain, heart attack or any other heart disease, stroke, paralysis, kidney, urinary or bladder disorders reproductive organ or prostate disorders, tuberculosis, asthma or any other lung disease, blood disorders anemia, endocrine or thyroid disorders?

6.                The insured gave answer in negative to the above question.

7.                The Opposite Parties-Insurance Company placed on record the Discharge Certificate of insured –Rajinder, issued by Shah Satnam Ji Speciality Hospitals, Sirsa (Exhibit OP-4). A perusal of this certificate shows that Rajinder-insured was admitted in the hospital on 10.02.2012 and was discharged on 15.02.2012. Relevant part of the certificate reads as under:-

“This is to state that according to available record, Mr. Rajinder s/o Sh. Kitab Singh Age 39 Years/Male Resident of Roopgarh, Tehsil & District Jind, (Haryana) was suffering from Diabetic Neuropathy with quadriparesis. During the course of his treatment, he was admitted in this hospital on 10-02-2012 and was discharged on 15-02-2012.”

8.                From the above evidence it is established that the insured did not disclose the true and material fact regarding his health in the Proposal Form (Exhibit OP-1).

9.                It is well settled principle of law that any incorrect information and false statement by the insured regarding health, age and income makes the insurance contract null and void.  Support to this view can be had from the judgment rendered by Hon’ble National Commission in Life Insurance Corporation of India versus Smt. Minu Kalita, III(2002) CPJ 10 (NC).

10.              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………….”

11.              Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

12.              In P.C. Chacko v. Chairman LIC of India, (2008) 1 Supreme Court Cases 321 Hon’ble Apex Court held as under:-

“22.   We are not unmindful of the fact that Life Insurance Corporation being a State within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reason of an act of the insured. This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the court carry the bargaining powers of the contracting parties. It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/proposal form, the respondents had acted unjustifiably or the conditions imposed are unconstitutional.”

13.              In Crown Consultants Pvt. Ltd. Versus Oriental Insurance Company Ltd., III(2011) CPJ 439 (NC), Hon’ble National Commission held as under:-

“19.     A contract of insurance is based on the doctrine of uberrima fides, i.e., “utmost good faith”, in the conduct of the insured. This doctrine was enunciated as far back as in 1766 by Lord Mansfield in the celebrated case of Carter V. Boehm, (1766) 97ER 1162, 1164, in the following words:

“Insurance is a contract of speculation….The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist….Good faith forbids either party for concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.”

 

14.                       In Life Insurance Corporation of India v. Bimla Devi, 2016(1) C.P.J. 57, it has been held by Hon’ble National Commission that in a Contract of Insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “material fact”. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his 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.

15.              In view of the above, it is proved that the insured concealed the true fact regarding his health which was material at the time of obtaining the policy. Since, the policy was obtained by the insured on mis-statement and by concealment of true fact, so, the insurer is not liable to pay the sum assured to the complainant.  Thus, the District Forum rightly dismissed the complaint.  Consequently, the appeal is dismissed being devoid of merits.

 

Announced 24.01.2017

Diwan Singh Chauhan Member

B.M. Bedi Judicial Member

Nawab Singh President

CL