Heard learned counsel for the appellant and respondent.
2. This appeal is filed U/S-15 of erstwhile Consumer Protection Act,1986(herein-after called the Act). Hereinafter, the parties to this appeal shall be referred to with reference to their respective status before the learned District Forum.
3. The unfolded story of the case of the complainant is that the complainant ‘s wife Late Choudhury Itishri Sahoo has purchased policy for Rs.2,75, 000/- bearing No.585018338 which was valid from 28.07.2003 to 28.08.2008. The wife of the complainant has paid the premium within due time during the life time but she died due to cardiac arrest on 01.11.2005. It is further stated that after the death of insured the claim was filed by the complainant before the OP alongwith the documents but the OP repudiated the claim on 28.03.2007 stating that the complainant is has suppressed about the previous policy, she has purchased. As the policy condition has been violated, the OP repudiated the claim but challenging such repudiation the complaint was filed.
4. The OP filed written version stating that they have received the claim and repudiated the claim on 28.03.2007 because the complainant has purchased five policies including the present policy. Out of five policies, she has mentioned about four nos. of policies but did not mention about the policy No.585214526 in her proposal form. Since, the insured has suppressed about purchase of this policy, same amounts to suppression of material fact and as such U/S-45 of the Insurance Act, they have rightly rejected or repudiate the claim. Therefore, they averred that there is no deficiency of service on their part.
5. After hearing both the parties, learned District Forum passed the following order:-
“In the result, the complaint petition is dismissed on contest against the OPs but without cost.”
6. Learned counsel for the appellant submitted that learned District Forum has committed error in law by not giving opportunity to the complainant to adduce evidence towards the defect pointed out by the OP while repudiating the claim. Further he submitted that the repudiation of the claim is also barred by limitation as per Section-45 of the Insurance Act and such legal provision has not been taken into consideration by the learned District Forum. She submitted that when the OP has no authority to call the policy in question on any ground after two years of commencement of the policy. Thus there is no merit with the case of OP. Learned District Forum has thus committed material irregularity by dismissing the complaint. So, he submitted to allow the appeal by setting aside the impugned order.
7. Learned counsel for the respondent submitted that learned District Forum has discussed the material on record at length. He submitted that the insured has filled up the proposal form and any suppression of fact relating to other policy she has possessed is material information to which she was supposed to disclose because insured in such case is at liberty to allow to purchase policy or not. Since, the insurer is an educated lady and sign in English, the non-disclosure of the said policy no. is a material omission. So, learned District Forum has rightly held that the material omission being made by the insured does not merit her case to allow same. So, she submitted to confirm the impugned order.
8. Considered the submission of learned counsel for the parties, perused the DFR and impugned order.
9. No doubt the complainant is required to prove the deficiency of service on the part of the OP. However, in the instant case the OP has admittedly repudiated the claim stating that the insured has suppressed the material fact by not disclosing all the policies, she has already purchased earlier to present policy. It is settled in the decision of Supreme Court Mithoolal Nayak-Vrs-Life Insurance Corporation of India in 1962 AIR 814,SCR Supl. (2) 571 and same being followed by other decision of Hon’ble Supreme Court where it has been observed with reference to Section-45 of the Insurance Act in the following manner.
“ 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.”
With due respect to these decisions, it is also settled that the onus lies on the OP to prove all these pre-conditions to repudiate the claim.
10. Before going to discuss about submission of material fact U/S-45 of Insurance Act it is necessary to state the provision of law before amendment of said section which is as follows:-
45. “No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter of suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose;
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”
11. The aforesaid Section-45 of Insurance Act has commenced with non-obstantee clause. Thus, policy in question can not be called in question after expiry of two years from the date of commencement of policy . Therefore, it is necessary to fnd out whether the ingredients of Section-45 has been proved by the OP to justify the ground of repudiation. In the instant case admittedly the policy in question was purchased on 28.07.2003 and the insured died on 01.11.2005. Since, the insured has died after two years of commencement of policy, the policy can not be called in question by the OP on any ground as mentioned in the Act itself. Therefore, the repudiation of the claim in question is itself illegal from its inception.
12. So far the merit of the case is concerned, it appears that the insured had purchased five policies and four policies have been settled before purchase of the policy in question. The proposal form only shows that if at all the insured has purchased any policy while proposing to purchase new policy. When there is no existing policy running, so any omission of such policy can not be said as material omission. However, when Section-45 is not applicable in facts and circumstances of the case, the repudiation itself is illegal. Hence, the impugned order, dismissing the complaint is absolutely illegal and improper.
13. In view of aforesaid discussion, the impugned order is set-aside and the OP is directed to settle the claim within 45 days from the date of receipt of this order without any hindrance and payment would be made within that period to the complainant. It is made clear that the OP would not stand on the way of availing of the settled amount by the complainant. If this order is not complied within above 45 days then sum assured, amount will carry 12 % interest and the same would be payable by the OP to the complainant from date of impugned order till date of payment made.
In the result, the appeal is allowed. No cost.
Free copy of the order be supplied to the respective parties or they may download same from the confonet or webtsite of this Commission to treat same as copy of order received from this Commission.
DFR be sent back forthwith.
