1.      The Appellant filed the instant Appeal under section 51(1) of the Consumer Protection Act, 2019 (hereinafter referred to as “the Act”), against the Order dated 22.07.2022 passed by the learned State Consumer Disputes Redressal Commission, Madhya Pradesh (“State Commission”) in Consumer Complaint No. 83/2022, wherein the State Commission dismissed the Complaint.

2.      As per report of the Registry, there is 31 days delay filing the Appeal. For reasons stated in IA/9118/2022, the delay is condoned.

3.      For convenience, the parties in the present matter are being referred to as per position held in the Consumer Complaint.

4.      The brief facts of the case are that the complainant's husband, Dilip Kumar Singh, obtained an insurance policy from OP insurance company on 28.06.2015. On 16.08.2015, while returning from Omkareshwar to Ujjain during Kavad Yatra, he met with an accident near Baigram on the Indore-Khandwa road and died. Following his death, the complainant submitted a claim to OP insurance company. However, the same was rejected on the ground that material facts about previous health conditions of the deceased were not disclosed in the proposal form. Hence, complainant filed C.C. No. 83/2022.

5.      In reply, the OP insurer brought out that all relevant information was provided to the life assured at the time of obtaining the insurance policy. He agreed, filled details and signed the proposal form. Upon submission of required inputs, the insurance policy No. 17686503 HDFC Life Click-2 Protect+ was issued. On receiving notice of his death and subsequent claim, an investigation was conducted. It was discovered that the life assured provided false information regarding his health in columns 23 and 28 of the proposal form. Investigation revealed that was suffering from Diabetes Mellitus, Coronary Artery Disease, Triple Vessel Disease, and Myocardial Infarction, and had undergone Angioplasty prior to taking the policy. He had also been diagnosed with Coronary Artery Disease before obtaining the policy. Since these material facts were concealed by the insured at the time of policy issuance, the claim on the insured was not payable.

6.      The learned State Commission vide order dated 22.07.2022 dismissed the complaint with the following observations:

12. As determined by the Hon'ble Supreme Court and the National Commission in various judicial citations, if the correct information regarding health is not given in the proposal form, then the claim will not be considered payable by the Respondent insurance company. It has also been determined in these judicial citations that before taking the insurance policy, if there was any disease, got treatment and its information was not given in the proposal form, then the claim is not considered payable. In the present case also, the husband of the complainant i.e. the insured has been treated in CHL Hospital between 30-12-2012 to 02-01-2013. The insurance policy was received on 28-6-2015 by filling the proposal form on 04-06-2015. Even before taking the policy, the complainant's husband was treated, the said information was not given by the complainant's husband i.e. the insured in the proposal form. Therefore, refusal of claim by the Respondent insurance company cannot be treated as deficiency in service.

13. In the light of the above discussion, the complaint filed is dismissed as the complainant has not been able to prove the deficiency in service or unfair trade practice by the Respondent insurance company.”

7.    Being aggrieved by the impugned order dated 22.07.2022 passed by the Ld. State Commission, Complainant (Appellant herein) filed this present Appeal no. 714 of 2022 praying that:

A. The present First Appeal be allowed and the Impugned Judgment and Final Order dated 22.07.2022 passed by the Learned State Consumer Disputes Redressal Commission, Bhopal, Madhya Pradesh, in Consumer Complaint No. CC/16/83 be quashed and set aside;

B.             Pass such other or further orders or orders as this Court may deem
fit and proper in the facts and circumstances of the case.”

8.    In the grounds of the instant appeal, the Appellant has mainly contended the following:

A. The insured died in a road accident on 16.08.2015, during the validity of the policy. It is undisputed that the policy was effective as on that date. The report dated 05.09.2015 and post-mortem report dated 17.08.2015 confirmed that he died due to serious head injury sustained in the accident. The investigation report corroborated that his death resulted from a road accident.

B.    OP repudiated the claim on 07.03.2016 on the grounds of nondisclosure of pre-existing conditions and a prior Angioplasty, contradicting legal principles. He underwent complete medical examination by OP on 12.06.2015 before policy issue. The investigation confirmed that he died in a road accident and the alleged nondisclosure had no relevance to the cause of death.

C.    The. State Commission erred in failing to recognize that the wrongful repudiation of the complainant's claim demonstrated clear deficiency in service and unfair trade practices. Further, the State Commission overlooked key facts and failed to apply the legal principles established by the Hon'ble Apex Court in Reliance Nippon Life Insurance Co. Ltd. v. Savita Gajanan Patil, 2019 SCC Online NCDRC 1040, and Sulbha Prakash Motegaonkar v. Life Insurance Corporation of India, 2015 SCC Online SC 1880, while dismissing the complaint.

9.    In his arguments, the learned Counsel for the complainant argued that the cause of death of the deceased is a severe head injury suffered by him in a road accident which had no nexus to the pre-existing illness of the deceased, he referred to Final Report dated 05.09.2015 to support his claim. The repudiation of claim on such ground claimed by the OP was incorrect and unjustified and referred to Sulbha Prakash Motegaonkar v. Life Insurance Corporation of India, 2015 SCC Online SC 1880 and Reliance Nippon Life Insurance Co. Ltd. v Savita Gajanan Patil, 2019 SCC Online NCDRC 1040, and concluded that since the medical ailments/the alleged non-disclosed material information, was not the cause of death of the Insured, the claim of the Appellant was liable to be accepted by the OP Company.

10.    In response, the Ld. Counsel for the OP referred to the doctrine of “Uberrima fidae" (utmost good faith), and placed reliance on Vikram Greentech (I) Ltd. v. New India Assurance Co. Ltd., (2009) 5 SCC 599; Life Insurance Corporation of India & Ors. Vs Asha Goel & Anr., (2001) 2 SCC 160; Life Insurance Corporation of India Vs. Shri Ghuman Singh (Revision Petition No. 306 of 2004); St. Divisional Manager, L.I.C of India Vs Smt. Gangamma, 2002 (111) CP] 56 (NC); Life Insurance Corporation of India Vs. Minikalita, 2002 (111) CP 10 (NC), and P.C. Chako and Anr. Vs. Chairman, Life Insurance Corporation of India and Ors, 2007 (13) SCALE 329. She argued that the policyholder was duty-bound to reveal all relevant facts to the insurer to determine the policyholder’s eligibility for availing the insurance. She further argued that the since the deceased failed to disclose material facts involving his health that he was suffering from Diabetes
mellitus, Coronary Artery Disease, Triple Vessel Diseased and Myocardial Infraction and had undergone Angioplasty prior to the policy issuance, the complaint was liable to be dismissed and relied on Sanjay Atmaram Patel Vs. Divisional Manager, LIC & Ors R.P. No. 1573 of 2012 (NC) and Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. IV (2009) CP] 8 (SC). She contended that the policy was voidable due to suppression of a material fact and referred to Clause 2 of Part F of the policy. She further relied on Bharathi Knitting Co. Vs. DHL Worldwide Express Courier, (1996) 4SCC 704 and HDFC Bank Ltd. Vs. Kanwar Ohri & Ors., RP No.
2001 of 2012, wherein it was held that Forums and Commissions had no Jurisdiction to modify the terms of the agreement, which had been arrived at between the parties and when there was an acute dispute relating to facts, the Forum and Commission ought not have gone behind the terms of the Agreement and should instead referred the parties to the Civil Court. She placed reliance on Reliance Life Insurance Co. Ltd. V. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 and Section 19 of the Indian Contract Act, 1872 and argued that suppression of the facts made in proposal form would render Insurance Policy voidable by the Insurer. She reiterated that the diseased committed a Voluntary Non Disclosure of material information and referred to Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848. She further referred to s. 45 of the Insurance Act, 1938 and prayed that the appeal be dismissed.

11.    I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned counsels for both the parties.

12.    The main issue to be determined is, notwithstanding his answers to the specific questions with respect to his health/ medical conditions, whether the Appellant/Complainant is entitled to claim against the death of the deceased life insured (DLI), who died in a road accident? 

13.    It is a matter of record that the Diseased Life Assured was issued HDFC Life Click 2
 Protect+ Plan vide Policy No. 17686503 for an insured sum of Rs.50,00,000/- which had the policy term of 20 years and Premium Paying Term of 20 years commencing from 28.06.2015. Undisputedly, a complete medical check-up of the DLA was conducted by the OP Company on 12.06.2015. It is undisputed that unfortunately, on 16.08.2015, the DLA met with an accident and died on the spot due to a head injury. The Final Report, which included the post-mortem report dated 17.08.2015, mentioned the cause of death as being due to shock and haemorrhage caused by serious head injury. No other cause of death was mentioned in the Investigator Report. It is also an admitted position that the insured was suffering certain ailments and had not disclosed these material facts at the time of taking the insurance policies. The DLI did not disclose the medical conditions while filling the proposal and obtained the policies. The OP asserted that the contract for life insurance is based on utmost good faith and the insured was bound to clearly bring out all prescribed details, including his medical condition. On the other hand, learned counsel for the complainant argued that the cause insured’s death in an accident was not related to pre-existing illness and he died due to heart attack. Thus, she is entitled to claim under the policy based on the judgment of Hon’ble Supreme Court in Sulbha Prakash Motegaonkar vs. LIC of India, Civil Appeal No.8245 of 2015, decided on 05.10.2015.

14.    Insurance contracts are special contracts based on the general principles of full disclosure inasmuch as a person seeking insurance is bound to disclose all material facts relating to the risk involved. Law demands a higher standard of good faith in matters of insurance contracts which is expressed in the legal maxim “uberrimae fidei”, i.e., utmost good faith. This duty of disclosure is codified in Section 45 of the Insurance Act, 1938 which prohibits any insurance contract being called into question after two (2) years, except where good faith obligations are violated. The insured has duty to the insurer to disclose all material facts, and vice-versa, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must conform to the statements in the proposal form or prospectus, or those representations made through his agents. Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the parties towards each other.  At the same time, it is undisputed that the complainant had not disclosed about he suffering from certain medical conditions. It is also a matter of record that, notwithstanding the dispute about the pre-existing medical conditions, the death of the life insured had occasioned on 16.08.2015 due to head injury suffered by him in a road accident, which is independent of the stated medical conditions.

15.  The Hon’ble Supreme Court in the case of Sulbha Prakash Motegaonkar (Supra) has held as under:

      “We have heard learned counsel for the parties. It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction. The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

 We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.

Accordingly, we set aside the order passed by the National Commission and allow the appeal. The respondent will accept the claim made by the appellants within a period of four weeks from today and make the due payment.”

16.    Further, the Hon’ble Supreme Court in the case of Om Prakash Ahuja versus Reliance General Insurance Co. Ltd., 2023 LiveLaw (SC) 509 wherein it has been held as under:

“26. The ground on which renewal of insurance policy to the appellant is sought to be refused is that while taking the initial policy, the appellant had failed to disclose that his wife (now deceased) was suffering from rheumatic heart disease. Though she expired of cancer. The fact remains that the first policy was taken by the appellant for the period from 07.07.2007 to 06.07.2008, which was renewed for another year. The claims even for the 6 period, wherein valid policy was available with the appellant, were repudiated. Renewal of policy beyond 07.07.2009 onwards was refused relying upon the guidelines issued by the Insurance Regulatory and Development Authority vide communication dated March 31, 2009. The claim of the appellant was repudiated on that very ground namely nondisclosure of the disease by which the wife of the appellant (now deceased) suffered at the time of purchase of initial policy. The repudiation of claim by the insurance company was subject matter of consideration before the Fora at different levels under the Consumer Protection Act, 1986. The rejection of the claim on the ground that there was concealment of certain material facts by the appellant at the time of purchase of policy, was not found to be tenable and the insurance company was directed to reimburse the expenses incurred for the period from 07.07.2007 to 06.07.2009. The aforesaid amount was paid by the insurance company. The order passed by the National Commission was not challenged any further by the Insurance Company. From this, it is established that even the Insurance Company accepted the fact that non-mentioning of the disease from which the deceased wife of the appellant suffered at the time of purchasing the policy was not material, as the death was caused from a different disease all together. Both had no relation with each other. Now, the insurance company cannot be permitted to raise same plea to deny renewal of insurance policy to the appellant for the period from 07.07.2009 onwards. Even though direction was given by the District Forum vide order dated 11.09.2009 to renew the policy further but it was not renewed, till such time interim order was passed by the National Commission on 13.05.2011.”

17.    In conclusion, since the DLI died from a road accident, which is entirely independent of his undisclosed ailments, the Appellant/ Complainant is entitled to the insurance claim under the policy. The insurance company’s repudiation of the claim is therefore untenable, and the complainant is entitled to receive the insured sum for the accidental death of the DLI.

18.    In view of the foregoing discussion, the First Appeal No.714 of 2022 is allowed and the impugned order passed by the State Commission dated 22.07.2022 in C.C. No. 83/2022 is set aside.  The Respondent Insurance Company is directed to pay the sum insured under the insurance policy in question to the Appellant/ Complainant along with interest 9% per annum from the date of filing of the complaint before the State Commission till realization, within four weeks. In the event of default, the interest shall be carry @ 12% per annum for such extended period. The Respondent Insurance Company is also directed to pay a litigation cost of Rs.25,000/- to the Appellant/Complainant.

19.    All pending Applications, if any, also stand disposed of.