1.      This revision petition under section 21(b) of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order dated 21.10.2016 in First Appeal no. 159 of 2009 of the State Consumer Disputes Redressal Commission, Lucknow (in short, the ‘State Commission’) allowing the appeal and dismissing order dated 02.01.2009 of the District Consumer Disputes Redressal Forum, Azamgarh (in short, the ‘District Forum’) in consumer complaint no. 187/2006.

2.      The relevant facts of the case, according to the petitioner, are that the wife of the petitioner obtained a life insurance policy from respondent no.1 for Rs.2,00,000/- vide policy no. 29183324 by depositing Rs. 6406/- as premium on 28.03.2002 after a medical examination. The insured died suddenly due to chest pain on 12.05.2003 and information regarding the same was given the same day to respondent no. 1. However, the claim of insurance filed by petitioner was rejected by the respondent allegedly arbitrarily manner, with an intention to usurp the money of the petitioner.

3.     Aggrieved by the decision of the respondent, the petitioner filed a complaint before the District Forum which, vide its order dated 02.01.2009, upheld the complaint and ordered payment with interest. The District Forum’s finding was that the fact that insured suffered from a pre-existing illness was not revealed in the application form and had only stated that the insured was not well, with no evidence filed to support this argument by the respondent. On the point of suppression of material fact, it was held that the respondent through its evidence had failed to prove all the four conditions (a) whether the statement/ details given by the insured is material depends upon the fact which need to be disclosed by the insured and had been concealed by the insured; (b) whether the material fact was concealed by the insured fraudulently; (c) whether the insured was aware at the time of statement that the statement given by her is was false, or she was aware that she was hiding the material fact which needed to be disclosed; and (iv) whether suppression was related with the fact, which was in the prior knowledge of the insured and which cannot be ascertained by inquiry through a prudent person. Therefore, the District Forum allowed the complaint and ordered the respondent to pay Rs.2,00,000/- with bonus. The finding of the District Form was as under:-

The insurance corporation has cancelled the death claim of the complainant with wrong arguments as the cancellation is not based on the material facts. In case material fact would have been that the illness was not revealed but in the application by the insurance corporation they have stated that the insured was not well, but in regard to support of this argument no evidence has been filed by the opposite insurance corporation.

Thus, in the present case under section 45 of the Insurance Act, 1938, on the point of suppression of material fact and as per the judgment rendered by the Apex Court the Life Insurance Corporation of India through its evidences has failed to prove all the four conditions and after perusal of evidence available on record we are of the opinion that the current case of the complainant against Life Insurance Corporation of India and Ors., is fit to be accepted.

4.      Aggrieved by the order of District Forum, respondent filed an appeal before the State Commission which, vide its order dated 21.10.2016, held that an insurance policy between the insured and the insurance company was a contract which was based on mutual trust. The reason for cancellation stated by the respondent was that insured had not appeared before the clinical examiner and hence, the policy was obtained by committing fraud. Both the parties presented their own handwriting experts before District Forum to prove that the signature at the time of medical examination was / was not that of the Deceased Life Assured (DLA) and their reports were contradictory. According to the State Commission, complex facts and disputable questions were involved. Hence, it allowed the appeal of the respondent and set aside the order dated 02.01.2009 of the District Forum. The order of the State Commission recorded the following finding:

There is difference in report of both the handwriting experts. District Forum in its judgment found that death claim of the complainant was wrongly rejected by the insurance company as the facts about cancellation is not based on the material fact. It is first duty of the agent to get the details about health, habits, family description, and source of income before the policy could be signed. But this forum is not satisfied with this argument of the District Forum. The insurance policy between the insured and the insurance company is a contract which is based on mutual trust. Insurance Company in its statement for cancellation has clearly stated that for clinical examination the insured did not appear before the clinical examiner, hence, the policy was obtained by committing fraud. Before the District Forum both the parties had presented report of their own handwriting experts which in itself is contradictory. On this disputable issue detailed evidence is required, merely on basis of evidence by affidavit, effective summary proceedings between the parties cannot take place and matter cannot be disposed of. According to us in this case complexity of facts and disputable questions are involved. This case as not being entertained in the Consumer Forum, the current appeal is fit to be accepted and the complaint is fit to be dismissed.

The appeal is accepted and the decision/ order of district forum dated 02.01.2009 is dismissed and the complaint is cancelled.

This order is impugned before us.

5.     The case of the respondent is that his wife obtained a life insurance policy from the respondent for a sum of Rs. 2,00,000/- which was approved after it was satisfied with a medical check-up. The respondent issued policy no.291833324 on 28.03.2002 wherein the petitioner was the nominee. The insured died on 12.05.2003 due to cardio - respiratory arrest. The petitioner filed a claim under the policy. However, the same was rejected on 31.03.2005. on the ground that the DLA was ill prior to the taking of the policy and that the DLA had not personally presented herself for medical examination and the signatures in the offer letter and medical check-up form did not match. The petitioner thereafter filed a complaint case no. 187 of 2006 against the rejection of the claim which was allowed by the District Forum but set aside by the State Commission.

6.     The grounds taken by the petitioner in the revision petition are that no relevant evidence has been brought on record to prove that the deceased was suffering from any pre-existing disease at the time of taking of the policy. Further, he contends that repudiation of the claim was illegal as the deceased was thoroughly and medically examined by an expert doctor prior to issuance of the policy.

7.     In reply, the respondent contended that the insured had mentioned in the proposal form that she was in sound health and had not undergone any treatment or operation whereas as per statements of Shiv Prasad Rai, Sarpanch and Prem Shankar Rai, Parikishit Prajapati the DLA had been keeping unwell and had undergone treatment in Calcutta. The respondent contended that evidence given by the handwriting expert shows that the signatures on the proposal form and signature on medical examination report do not match which proves fraud. The insured concealed the fact that she was not in goodhealth and had not disclosed the full facts of her health and therefore misled the insurance company which rendered the agreement/contract void between the parties.

8.     The petitioner relied upon the judgment of Hon’ble Supreme Court in CCI Chambers Co-Operative Society Ltd. vs Development Credit Bank Ltd. 2003 (7) SCC 233, wherein it was held that Consumer Fora are competent to entertain complaints involving disputed questions of law and once such a complaint had been entertained and an order passed, the Appellate Court cannot turn the clock. Reliance was also placed by the petitioner on this Commission’s judgment LIC vs Smt. Priya Sharma & Anr. 2012 NCJ 870 (NC) wherein it was held that the onus to prove that insured was suffering from a pre-existing disease lies on the insurance company and if the company fails in adducing any evidence, repudiation of the claim is liable to be rejected. The decision of the District Forum is therefore, in consonance with the settled principles of law.

9.     On its part, the respondent relied upon the judgment of the Hon’ble Supreme Court in Life Insurance Corporation of India Vs. Asha Goel, AIR 2001 SC 549 decided on 13.12.2000 in which it was held that;

the policy holder was clearly guilty of a fraudulent suppression of material facts when he made his statements, which he must have known were deliberately false and hence, the policy issued to him relying on those statements was vitiated.

10.   Reliance was also placed by the respondent on the Hon’ble Supreme Court’s judgment in Life Insurance Corporation of India Vs. Smt. G. M. Channabasamma (1991) 1 SCC 357 decided on 06.12.1990 wherein it was held that;

 it is well settled that a contract of insurance is contract Uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which way be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making our disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted.

11.   Respondent also relied upon the judgment of the Hon’ble Supreme Court in Mithoolal Nayak Vs. Life Insurance Corporation of India, 1962 AIR 814 dated 15.01.1962 which laid down three conditions to establish suppression of material facts:

a.       The statement must be on a material matter or must suppress facts which it was material to disclose;

b.       The suppression must be fraudulently made by the policy holder; and

c.       The policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.

12.   It was argued that as per this, the DLA was guilty of suppression of material facts. I have heard the learned counsel for both the parties and perused the material on record carefully. The insurance policy of the DLA is dated 28.03.2002 and the insured died on 12.05.2003 due to pain in chest. Information of the same was given to the respondent the same day. Petitioner’s claim before the insurance company was repudiated on the ground that insured was ill prior to taking the policy based upon its investigations and the variation of signatures on the offer letter and medical examination. The respondent. before issuing the policy to the insured, had a medical examination of insured conducted and after being satisfied with the medical examination the policy was issued to the insured.  The respondent relies upon the statements of the village Sarpanch and another to contend that the DLA had a pre-existing medical contention for which she visited Kolkata. However, this averment is not supported by any documentary evidence and must, therefore, be disregarded as being unsubstantiated. No document from any hospital has been filed by the respondent to prove that the insured was ill prior to taking the policy. The Hon’ble Supreme Court in Reliance Life Insurance Co Ltd & Anr Vs. Rekhaben Nareshbhai Rathod in Civil Appeal No. 4261 of 2019 decided on 24.04.2019, held that:

“In respect of information which is not so recorded, the onus of proof lies on the insurer who claims that there was a suppression of material information or that the insured provided misleading or false information on any matter that was material to the grant of the cover”.

13.   This onus has not been discharged by the respondent. Respondent has also contended that the policy was obtained through fraud since the DLA did not present herself personally for the medical examination prior to the issuance of the policy but had someone else impersonate her. This is contended on the basis of the variation in the signatures on the offer letter and the medical examination. The reports of the handwriting experts produced by both the respondent and the petitioner, however, are conflicting and do not lead any support to the respondent. The State Commission, however, has arrived at the following finding:

The appeal is accepted and the decision/ order of District Forum dated 02.01.2009 is dismissed and the complaint is cancelled.

Complainant is free to initiate a case in Civil Court and that he shall have the liberty to enjoy the benefit of time frame under Section 14 of the Limitation Act 1963.

          Both the parties shall bear their own litigation expenses.

14.   The contentions of the respondent that suppression was of material facts and that there was fraud committed in obtaining the policy through impersonation, the reliance of the respondent upon the statement of the Sarpanch and another is of no help since this is not supported by documentary evidence and the contradictory reports of the handwriting experts. Hence, reliance of Mithoolal Nayak (supra) and Asha Goel (supra) by respondent does not sustain. As regards, the reliance on Smt G M Channabasamma (supra) regarding ubbermia fides, the fact that it has not been proved that there was withholding of facts required to be disclosed, it is upon the respondent to establish this, as held in Rekhaben (supra). The onus of proof lies on the insurer to prove that the insured suppressed material information or provided false information material to the grant of the insurance cover. In the absence of any cogent evidence to prove suppression of material information pertaining to a pre-existing illness or impersonation at the medical examination, this revision petition in liable to succeed.

15.   In view of the foregoing discussion and the in the facts and circumstances of this case, the revision petition is allowed. The order of the State Commission is set aside and the order of the District Forum is upheld.  Parties shall bear their own costs.

Pending IAs, if any, also stand disposed with this order.