Haryana

StateCommission

A/6/2017

KAVITA DEVI - Complainant(s)

Versus

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

C.R.OLLA

01 Dec 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

                                                First Appeal No.           06 of 2017

                                                Date of Institution:       02.01.2017

                                                Date of Decision:         01.12.2017

 

Kavita Devi widow of Ram Kumar, Village and Post Office Jagan, Tehsil Adampur, District Hisar, Haryana.

                             Appellant-Complainant

 

Versus

 

1.      Birla Sun Life Insurance Company Limited, on the Upper side Canara Bank, G.T. Road, Fatehabad through its Branch Manager/Kuldeep Dhanju Agency Manager, Harnam Singh Colony Bighar Road, Fatehabad.

 

2.      Birla Sun Life Insurance Company Limited, G Corp Tech Park, 5^th and 6^th Floor, Kashar Wadavali Ghodbunder Road, Thane (W) 4006001 through its Authorised Person.

                                      Respondents-Opposite Parties

 

 

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

                             Shri Balbir Singh, Judicial Member.

                             Shri Diwan Singh Chauhan, Member.

 

                                                         

Present:              None for the appellant

Shri S.C. Thatai, Advocate for the respondents     

           

                                                   O R D E R

 

 

NAWAB SINGH J, (ORAL)

 

This complainant’s (Kavita Devi) appeal is directed against the order dated August 08^th, 2016 passed by District Consumer Disputes Redressal Forum, Fatehabad (for short, ‘District Forum’) whereby complaint was dismissed.

2.      On March 31^st, 2012 Ram Kumar (deceased)-husband of the complainant (for short, ‘life assured’) purchased two insurance policies from Birla Sun Life Insurance Company Limited-opposite parties (for short, ‘Insurance Company’).  The sum assured was Rs.3,52,418/- and Rs.6,00,470/- respectively.  On June 06^th, 2012 the life assured died.  The complainant lodged claim with the Insurance Company.   The Insurance Company repudiated the claim on the ground that the life assured was suffering from cancer of lung with secondaries to liver and bones.  He was also suffering from Pneumonitis and was taking treatment for tuberculosis.  Hence, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum.

3.      Case called several times since morning but nobody appeared on behalf of the appellant-complainant. On the last date of hearing also, nobody appeared on behalf of the complainant. This Commission thinks it appropriate to decide the appeal on merits after hearing learned counsel for the Insurance Company and going through the case file.

4.      The question for consideration before this Commission as to whether the Insurance Company was justified in repudiating complainants’ claim or not?

5.      The life insured purchased two life insurance policies on March 31^st, 2012.  Prior to the purchase of the insurance policies, the life insured was suffering from cancer of lung with secondaries to liver and bones since April 2011 and was also a patient of Tuberculosis since June 2011 as is evident from Final Investigation Report dated August 30^th, 2013 (Annexure R-6) annexed with medical record (Annexures E to I).  The life assured also took leave from June 17^th, 2011 to June 23^rd, 2011, July 12^th to 14^th, 2011, August 02^nd to 04^th, 2011, August 24^th to 26^th, 2011, September 16^th to 17^th, 2011 and October 12^th to 13^th, 2011 for taking treatment of cancer from O.P. Jindal Institute of Medical Sciences, Model Town, Hisar (Annexure K).

6.      The aforesaid medical record has not been controverted by the learned counsel for the complainant.

7.      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.” 

8.      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………….”

9.      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.  ………..”

10.    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…..”  

11.    On the aforesaid facts and principles enunciated, it stands established to the hilt that the life insured was suffering from cancer and tuberculosis prior to the purchase of the insurance policies and he suppressed this fact. Thus, the District Forum has rightly dismissed the complaint and as such, the appeal is also dismissed. 

         

 

 

Announced 01.12.017

(Diwan Singh Chauhan) Member

(Balbir Singh) Judicial Member

(Nawab Singh) President

UK