1.      This Revision Petition No. 847 of 2020 challenges the order of Karnataka State Consumer Disputes Redressal Commission, Bangalore (‘the State Commission’) dated 27.08.2019. Vide this order, the State Commission dismissed FA No. 1439 of 2010 and affirmed the order of the District Consumer Disputes Redressal Forum, Davanagere (‘the District Forum’) dated 17.02.2010.

2.      As per report of the Registry, there is a delay of 166 days in filing this Revision Petition. For the reasons stated in IA/5627/2020, the delay is condoned.

3.      Brief facts of the case, as per the Complainant, are that one Mr. K. Chalapathi S/o. KV Subramanya Pillai had taken Unit Linked Plan from Petitioner/OP-1 on 22.12.2007 paying Rs.99,000/- as premium. The sum assured was Rs.4,95,000/-. On 18.07.2008 K. Chalapathi executed a deed of assignment of policy No.0077514195 in favour of the Complainant and the assignment was confirmed on 19.09.2008 by OP-1. On 16.11.2008 Mr. Chalapathi died at Tirupathi in SVRR Govt Hospital due to heart attack. The Complainant submitted claim with all documents to OP-1, but, OP repudiated the claim stating that Mr. K Chalapthi obtained the policy by suppressing material facts. Thus, alleging deficiency in service lodged a consumer complaint.

4.      In reply OP-1 admitted issue of policy to Mr. K Chalapathi and contended that the deceased K Chalapathi was suffering bronchial and vascular markings in both lungs since September 1997. He was also suffering from diabetes since three years prior to his death and deliberately concealed the material facts which were well within his knowledge and obtained the policy. Thus, there is no deficiency in service in repudiating the claim.

5.      The learned District Forum vide order dated 25.07.2019, allowed the complaint and directed the Petitioner/OP-1 as under:

“:ORDER:

Complaint is allowed in part in the following terms:

1. Opponents are directed to pay jointly and severally a sum of Rs.4,95,000/-, (Sum Assured) to the complainant within two months from today.
2. They shall pay Rs.15,000/- as compensation to the complainant within two months.
3. Further they shall pay Rs.2,000/- towards cost of litigation to the complainant.”

6.      Being aggrieved by the impugned order, the Petitioner/OPs filed an Appeal and the learned State Commission, vide order dated 27.08.2019 dismissed the same and observed as follows:

“6. Regarding issuance of unit link policy is admitted. Policy has been repudiated alleging that after the premium has paid and also it is secured, it is submitted by the insurance company that repudiation of policy is on the ground that insured obtained the policy without disclosing the ailment he was suffering. Further District Forum noted that there is no evidence to show that any particular doctor from whom the deceased was regularly taking treatment. In this regard document issued by Dr.Lohith is produced by the complainant wherein it is showed that Dr. Lohith has not maintained any record with regard to treatment given to Mr.K. Chalapathi in his clinic. Documents produced by OP No.1 only show that the insured was admitted to the Bapuji Hospital and - Bapuji Hospital record do not show that complainant suffering from any ailment on 22.12.2007. It goes to show that insured has not suffered from any serious disease and there is no question of suppression of fact. The stand taken by the insurer that insured was suffering from ailment and he has suppressed fact do not stand to any reason. Sum assured is Rs.4,95,000/-. Having noted that on preliminary grounds insurance company has taken negative steps and tried to repudiate the contract, the complainant claimed Rs.1.00 lakh as compensation. However, District Forum awarded Rs.4,90,000/- sum assured and also awarded Rs.15,000/- compensation. No cogent evidence produced by the OP and also no such serious disease from which complainant was suffering. We do not find any reason to interfere with the order of the District Forum. The above appeal is liable to be dismissed. Hence, the following:

ORDER

The above appeal is dismissed.

Amount in deposit shall be transmitted to the District Forum for disbursement.”

7.      In his arguments, the learned Counsel for the Petitioner reiterated the grounds in the Revision Petition and asserted that the Complainant was suppressed the pre-existing disease in the proposal form and obtained the policy and, therefore, the repudiation of claim was justified as per terms of the insurance policy. He sought the impugned orders of the lower fora be set aside.  He has relied upon:

(a) Reliance Life Insurance Co. Ltd. & Anr. V. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175;

(b) V. Kishan Rao Vs. Nikhil Super Speciality Hospital and Anr., (2010) 5 SCC 513;

(c) Malay Kumar Ganguly Vs. Dr. Sukumar Mukherjee and Ors, (2009) 9 SCC 221.

8.      No one appeared on behalf of Respondent /Complainant on 01.12.2023 despite service, he was placed ex-parte. 

9.      I have examined the pleadings and associated documents placed on record, including the reasoned orders of the learned District Forum and the learned State Commission and rendered thoughtful consideration to the arguments advanced by the learned Counsels for the Petitioner.

10.    The central issue and objection of the Petitioner/ OP Insurance Company is that it had rightly repudiated the claim on the ground of suppression of pre-existing disease at the time of filling the proposal form for taking the insurance policy.

11.    It is undisputed that the proposal form was filled and signed by the deceased insured on 30.11.2007. Subsequently, the policy in question was issued on 22.12.2007. Thus, it is clear that when the proposal form for taking policy was filled and signed by the deceased insured on 30.11.2007 he was taking the treatment of the disease i.e. bronchial and vascular markings in both lungs in the year 1997 and was under continuous treatment for the same since 1996 and also had history of Diabetes Mellitus Type II since three years and the same was not disclosed in the proposal form dated 30.11.2007, which is clearly suppression of pre-existing disease and fundamental breach of the insurance policy in question. Therefore, the argument of the Petitioner/ Insurer is supported by the legal precedent set forth by the Hon’ble Supreme Court in the case of Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 decided on 24.11.2019 has held that suppression of the facts made in proposal form will render Insurance Policy voidable by the Insurer.

12.    Further, the Hon’ble Supreme Court in Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848 decided on 09.10.2020 wherein it was observed as under:

“A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk.”

13.     Based on the discussion above, I am of the considered view that Order of both fora below are not legally tenable. There is no doubt to the fact that the deceased Insured had failed to disclose his known medical condition in the proposal form. Therefore, the Revision Petition is Allowed and the Orders of both the learned fora are set-aside. Consequently, Complaint No. 107 of 2009 filed before the District Forum is dismissed.

14.    Keeping in view the facts and circumstances of the present case, there shall be no order as to costs.

15.    All pending Applications, if any, also stand disposed of accordingly.