(Delivered on 04/07/2017)

Per Mr. S.B. Sawarkar, Hon’ble Member

1.      The present appeal is filed against the order of the District Forum,  Nagpur  passed in  complaint No. 619/2008 dated 18/03/2009 dismissing the complaint with cost.

2.      The complainant filed a consumer complaint that her deceased  life assured (DLA) husband  had taken  three policies of the  opposite party (in short O.P.) Nos. 1 to 3, with a total value of Rs. 3,00,000/-. The policies were given after medical examination and filing of form. On  27/06/2006  the DLA  become uneasy and was admitted to hospital where he died on 03/07/2006. The complainant  filed a claim with all documents. However,  the claim was repudiated  by the O.P. vide letter  dated 21/11/2006 on the ground that  the DLA had  suppressed  the information  about his  heart disease while taking the policy. She  filed complaint  on  13/12/2006 before the Insurance  Ombudsman. However,  her claim  was  dismissed  on  11/10/2007. Hence,  she filed  consumer complaint claiming deficiency in service  due to repudiation of her claim  with a prayer to  provide her the claim  of the policies with all benefits with interest at the rate of 12% with  Rs. 10,000/- for  physical  and mental harassment with cost of the complaint.

3.      On notice the O.P. Nos. 1&2 appeared. However, the O.P.No. 3 remained absent in spite of notice and hence  was declared exparte.

4.      The O.P.Nos. 1&2 countered the complaint  admitting that  the DLA  had taken  the policies. However, they  submitted that  the DLA was suffering with  a heart  disease  prior to the taking of the policy which he suppressed while filing  the  proposal form of  non medical  policy.  He was suffering with the disease  from the year 2000. It has  amply come to the notice from  the opinion and  treatment papers of  Dr. Arneja and Arneja Heart Institute. As  the DLA suppressed  the material information  the claim was repudiated  as per the  conditions of the  policy  and hence they denied  any deficiency in service on their part  with a  request to dismiss the complaint.

5.      The learned Forum perused the evidence and heard the parties and found that  the DLA was suffering from  Dialated  Cardio Myopathy (DCM) as per   the  certificate given by  Arneja Heart Institute which  stated that the  DLA was suffering with  DCM  from  the year 2000 and was on medication.  The DLA  took the policies on, one date, in December-2003.  Thus, the Forum held that the DLA suppressed the information while filing the proposal form.  The Insurance Ombudsman also considered the issue properly and thus rejected the claim. Hence, holding that the repudiation  of claim by the O.P. to be appropriate in view of the suppression of material. The Learned Forum passed the  order supra.

6.      Aggrieved against the order the complainant filed this appeal through advocate Shri Bawane & hence, is called as appellant.  Advocate Shri Gawande appeared on behalf of the original O.P. Nos. 1&2/now respondent Nos. 1&2. The original O.P.No.3 is referred as respondent No. 3 who remained absent in spite of  service of notice. Hence,  is declared  exparte.

7.      The advocate for the appellant submitted that the respondent had given the policy after proper medical examination. Also the respondent while repudiating the claim on the ground of suppression of medical history did not file the affidavit of the medical officer of  the Arneja Heart Institute where the DLA died.  He relied  on the following judgments.

i.        National Commission Judgment passed in LIC  Vs.  Smt.  Suresh  published at  2012(1) CPR 391 (NC). Wherein  the Hon’ble Commission held that the disentitlement   under  the policy  on the ground of concealment  or suppression  would arise  only if  there is evidence to show that  the insured  had undergone  hospitalization or treatment  for the disease  in the near  proximity when the insurance policy was obtained  and  chosen not to  disclose it.

ii.       National Commission Judgment passed in  LIC Vs.  Priya Sharma published at IV (2012) CPJ 646 (NC). Wherein  it is held that onus to prove that the insured  was suffering from pre existing disease is on the petitioner/insurance  compnay.

iii.      National Commission Judgment passed in United India Insurance Co. Ltd. Vs.  Veena Bhardwaj and another published at IV (2012) CPJ 782 (NC). Wherein  it is held that  insurance company  must prove suppression  by producing  cogent and  plausible  evidence.

iv.      National Commission Judgment passed in Met Life India  Insurance Co. Ltd. Vs.  Alturi Sri Venkateshwara Rao published at IV (2012) CPJ 831(NC). Wherein  it is held that  the statement of  insurance ombudsmen  cannot be made  the only ground  for suppression  of ailment. Cogent and plausible  evidence for  repudiation  is necessary.

v.       National Commission Judgment  passed  in  Bajaj Allianz General Insurance Co. Ltd. Vs.  Valsa Jose published at IV (2012) CPJ 839 (NC). Wherein It is held that  discharged  summary described  only  medicine taken by the respondent and  hyper tension  is a  life style  disease  easily controled with conservative medicine.  Repudiation  is not justified.

vi.      National Commission Judgment passed in  Bajaj Allianz General  Insurance Co.  vs. Kamalkumar  Ratera published at III (2012) CPJ 599 (NC). Wherein  it is held that it was obligatory upon the insurance company to prove that the medical condition or complication for which  claim has been prepared were preexisting on the date of  commencement  of policy.

vii.     Rajasthan Consumer Commission order passed in  LIC Vs. Dali Kunwar Dewada published at (2012) CPJ 378. Wherein  it is held that  once accepting the premium  and  entering in agreement  without  verifying  the facts,  insurance company cannot  wriggle  out  of liability  merely  saying that  contract was  made by  misrepresentation and concealment.

viii.    National Commission Judgment passed in  Life Insurance Corporation of India Vs. Sajida Begam published at  III(2007) CPJ 319 (NC). Wherein   it is held that  when examined  and  certified,  insured  is keeping good health at the date of issuance of policy,  and failure to  detect alleged  conditions at the time of giving policy,  the  repudiation  order is not justified.

ix.      National  Commission Judgment  passed in  New India  Insurance Co. Ltd. Vs.  Rajkumar  Chuchra  published at III (2007) CPJ 320 (NC). Wherein  it is held that  when  there is  no evidence  to prove  that  insured  suffered from  any disease  or received treatment before  purchase of policy, Hence,  the impugned order  is upheld.

x.       Andhra Pradesh Commission Judgment passed between LIC of India Vs.  Shekhar Babu published at III (2007) CPJ 278. It is  held that  to prove  repudiation,   suppressed material  ought to be  disclosed  and the  insured  must have  played  fraud . Burden  of  proving  of suppression  is on the insurance company  & hence,  the claim  repudiated  wrongly.

xi.      Haryana  Consumer Commission order passed in  LIC Vs.  Anandkumar  published  at II (2007) CPJ 211. Wherein  it is held that  medical report  cannot fix the period  that  the deceased suffered from alleged  disease  before taking policy. Insurer  is liable.

xii.     Chhatisgad  Commission order passed in LIC Vs.  Rani Kaur published at I (2005) CPJ 547. It is held that company failed  in its burden  to prove  suppression of material fact. Hence,  Forum order  is  upheld.

xiii.    Chhatisgad Commission passed in LIC Vs.  Radhika Madhuriya  published  at IV (2004) CPJ 131. Wherein for suppression  of material  fact burden to prove  existence  and knowledge of disease  at the time of policy  lies heavily  on insurer. The photocopies of medical certificate  is not relied  by the Forum. Hence,  deficiency  in service is  proved.

xiv.    Union Territory Commission order passed in  LIC Vs.  Jasbir Kaur published at I (2005) CPJ 781.  Wherein it is held that  the repudiation  of claim solely  based on  history  recorded on hospital, record  is arbitrary  and illegal. Deficiency in service is  proved.

xv.     Uttar Pradesh Commission order passed in  LIC of India Vs.  Smt.  Sudha Devi published at III(2001) CPJ 588. Wherein  it is held that no cogent evidence  is produced  to prove that  the deceased knew about the disease. Material suppression of facts  is  not established.  Hence,  insurance company is  liable to pay  insured  amount  along with interest.

8.      The advocate for the appellant also  raised the ground that  the DLA  was examined  by the  respondent’s  doctor . There is  no affidavit of doctor certifying  the  existence of disease & no evidence adduced to prove  that  the DLA  was suffering with the disease  and had taken treatment and was aware  that he is suppressing & that  the fact which are material  to decide the policy and suppressed with  intention of fraud. Only last  certificate from the  hospital  is  presented  with no evidence of treatment  before taking the policy. Hence, repudiation is unjustifiable. Therefore he requested that  the order of the learned Forum may  be set aside being  passed  without application of mind.

9.      The advocate of the respondent relied on the following judgments.

a.      Supreme Court Judgment passed in  Satwant Kumar Sandhu Vs. New India  Assurance Co. Ltd. dated 10/07/2009 S.C. Wherein the Hon’ble  Apex Court  held that   when  the  insured was suffering from diabetes  and  chronic renal  failure  and  stated to  be on regular  haemodialysis  when  he reported  sound health  to the questions of the insurer. He suppressed  material  on record & hence, the claim of the appellant  is found to be  fraudulent.  Hence,  the appeal  stands dismissed.   

b.      National Commission Judgment passed in LIC Vs. Smt. Kusum Patro in Revision Petition No. 1585/2011 dated 19/03/2012. Wherein the Hon’ble National Commission held that  the principle  underlying  the doctrine  of  disclosure   and the rule of  good faith  obliged  the proposer  to answer every question put to him with complete  honesty. Honesty  implies  truthfulness. Further the National Commission  held  that if the proposer has knowledge of such fact, he is obliged to  disclose it  particularly while answering  question in the proposal form. Needless to emphasis  that  any in accurate  answer will entitle  the insurer to repudiate  his liability  because there is  clear presumption  that any information  sought  for  in the proposal form is material  for the purpose  of entering  in  to a contract of insurance. Hence, the revision petition is allowed.

9.      The advocate for the respondent  therefore submitted that  the DLA  had taken three policies, which were non medical polices meaning  no medical examination was performed before  providing the policy which was based only on the truthful information  to be provided  by the  insurer.  The DLA  was  recorded  by the  Arneja Heart Institute  to be  a known  case of  Cardiomyopathy (CMP) which is  a serious  disease. The doctor has  claimed  the history  of deceased  from the year 2000. When the certificate  given by the institute of  repute is on record  no necessity  to file the affidavit. Also  the detail of treatment  at the time of  his admission are on record. Dr. Tolani who referred him   to Arneja Heart Institute  referred that DLA  is a patient of CMP for hospitalization  and  further  evaluation.  If   these certificate are seen it would  prove  that the  DLA  suffered with CMP  who  suppressed the information and hence the repudiation is correct which needs  to be  confirmed.  

10.    We considered  the contentions of  both the parties. We find that the policies  in question  are taken in the year  2004 and  are  non medical policies which are given only on the  information   of health  provided by the insurer. 

11.    We further  find that the  respondent  repudiated the claim on the ground of  the certificate issued by  Arneja Hospital  dated 25/09/2006 which says that the DLA was suffering with Dialated  Cardio Myopathy (DCM) from the  year 2000. However,  we find that  the respondent  has not submitted   any  clear document of actual  treatment  provided to DLA by any hospital or a doctor before proposal for  policies was  submitted by the DLA. The respondent  has not explained why documents  of prior treatment were not  collected from any hospital & produced before  the Forum to prove pre-existing disease & its knowledge by the DLA.

12.    To hold that  the  DLA  while taking the policy has suppressed the material information  with the intention  to deprive the respondent  from  knowing  material information  to come to the conclusion as to whether to provide the policy or not,  it is necessary that  it should  prove that the proposar  was well aware  of the  suppressed  material  like disease and  had suppressed it  with the intention to commit the  fraud so as to breach the conditions of the policy.  We find no material on record brought  by the respondent to show that  the DLA  husband of the appellant  was aware  of what  he was suffering with  and had suppressed the information  with the intention  to suppress it.  The various  judgments  cited by  the appellant  point  towards  the very important  aspect as discussed above that it is positive responsibility  of the respondent  to   collect the evidence  prior  to the date of proposal  of the policy  to prove that   the suppression  is with known intention. Only  a certificate  after the death of the DLA  from the hospital  is collected  & produced  by  respondent  which mentions cryptically  that  the DLA was known patient of  CMP.  It is not sufficient  to hold that  the DLA  was aware  or was suffering with the disease prior to his obtaining  policies  from respondent   and hence,  suppressed the material fact.

13.    We find here that  the policies are taken  in the year  2003 whereas  the death  was occurred   on 03/07/2006 which  certainly  does not create  any  relation with the  declaration of   physical health  by DLA & his death. We therefore find that the repudiation of the claim  by the respondent  does not stand  on the  sound  grounds  as are  illustrated and provided by the catena of judgments  held by the National Commission. We therefore find that  the repudiation is not justifiable.

14.    We find that the  learned Forum  did not visualize the  requirement of evidence  to hold the suppression  to be  intentional and passed  the order  only on  the  presumption based on the  uncorroborated certificate issued by Arneja  Institution after the death of the DLA. The order being not based  on  proper evaluation  of material deserves to be set aside.

15.    We therefore hold that   there is no cogent evidence to show that  the DLA  was suffering from any pre-existing  disease and that he was aware of his disease  at the time of  taking the policies  and hence,  it cannot  be said that he fraudulently  suppressed  material facts for obtaining  policies.  Thus  the claim of the policies  held by him  deserves to be  paid to  with all the interest  that  has accrued upon it. We therefore,  direct the  respondent  to provide the  claim of the policies  held by the  DLA from the  date of the complaint  i.e. 18/10/2008 till  final payment  with interest at the rate of 9% p.a.  and to provide the compensation  of Rs. 5,000/- for agony and Rs. 5,000/- as cost.  Hence, the order below.

ORDER

i.        The appeal is partly allowed.

ii.       The order of  the  District Forum is set aside.

iii.      The respondent Nos. 1&2  together or severally to  provide the claim of the three policies Nos. 290744,290751 & 290762 of Rs. 1,00,000/- each  with interest at the rate of 9% p.a. from the date of the complaint  ie. From 18/10/2008 till  final disbursement to the appellant.   

iv.      Respondent Nos. 1&2 together or severally  to provide  compensation of Rs. 5,000/- for physical and mental harassment  and Rs. 5,000/- as cost of appeal  & complaint   to  appellant.

v.       The order of the Commission be complied in the span of 30 days  from the date of receipt of it.

v.       Copy of the order be provided to both the parties, free of cost.