Haryana

StateCommission

A/652/2017

MURTI DEVI - Complainant(s)

Versus

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

R.S.BUDHWAR

02 Nov 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :       652 of 2017

Date of Institution:     30.05.2017

Date of Decision :      02.11.2017

 

Smt. Murti Devi widow of late Rajesh, resident of Village Barwa, Post Office Hathira, Tehsil Thanesar, District Kurukshetra.

                             Appellant-Complainant

 

Versus

 

1.      Birla Sun Life Insurance Company Limited, Registered Office One India Bulls Centre, Tower 1, 16^th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai.

 

2.      Birla Sun Life Insurance Company Limited, SCO 33, 2^nd Floor, Sector 17, Kurukshetra, through its Authorised Signatory.

Respondents-Opposite Parties

 

 

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

                             Shri Balbir Singh, Judicial Member.

                             Shri Diwan Singh Chauhan, Member.

                                                                                                                            

Argued by:          Shri Ankit Rana, Advocate for appellant.

                             Shri S.C. Thatai, Advocate for respondents-opposite parties.

 

                                                   O R D E R

 

 

NAWAB SINGH J.(ORAL)

 

          Rajesh-since deceased (for short, ‘life assured’) purchased BSLI Protector Plan Policy from Birla Sun Life Insurance Company Limited-opposite parties (for short, ‘Insurance Company’).  The date of issuance and maturity of the policy was June 15^th, 2011 and June 15^th, 2041 respectively. The policy term was 30 years. The sum assured was Rs.13,00,000/-. The life assured died on December 31^st, 2012. His wife Smt. Murti Devi-complainant filed claim with the Insurance Company but the same was repudiated on the ground that the deceased had pre-existing disease.  Hence, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Consumer Disputes Redressal Forum, Kurukshetra (for short, ‘District Forum’).

2.      The District Forum vide order dated April 20^th, 2017 dismissed the complaint.

3.      Aggrieved of the order, the complainant has filed instant appeal.

4.      The life insured purchased insurance policy on June 15^th, 2011. Prior to the purchase of the insurance policy, Insured was a patient of Tuberculosis as is evident from medical record (Exhibits OP-1 to OP-5).  He was taking treatment from Primary Health Centre (PHC), Kirmach from January 28^th, 2011.

5.      The aforesaid medical record has not been controverted by the learned counsel for the complainants.

6.      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.” 

7.      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………….”

8.      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.  ………..”

9.      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…..”  

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

 

 

Announced 02.11.2017

(Diwan Singh Chauhan) Member

(Balbir Singh) Judicial Member

(Nawab Singh) President

UK