Nidhi Verma, Member.
1 The present complaint has been received from the District Consumer Disputes Redressal Commission Amritsar by the order of the Hon’ble State Consumer Disputes Redressal Commission Punjab, Chandigarh for its disposal.
2 The complainant has filed the present complaint by invoking the provisions of Consumer Protection Act under Section 12 and 13 against the opposite party on the allegations that the mother of the complainant namely Smt. Manjit Kaur took insurance policy from opposite party bearing Policy No.17435483 under the plan HDFC SL ProGrowth- Flexi vide proposal dated 13.2.2015 and sum assured was Rs 4,75,000/- and the complainant was nominee of the said policy. Smt. Manjit Kaur mother of the complainant expired on 6.7.2016. After the death of Smt. Manjit Kaur, claim was lodged with the opposite party by the complainant and supplied all the documents but the opposite party repudiated the same vide letter dated 29.1.2017 on the ground that earlier policy taken by Smt. Manjit Kaur is having no effect over this policy and at the same time she had not received the Insurance Policy and was not aware of the policy number. Even otherwise that does not have any effect if a person is having two policies. The deceased Manjit Kaur was not suffering from any disease as alleged by opposite party. Moreover the other policy issued by Birla Sunlife General Insurance has settled the claim and has paid the claim amount to the complainant. Even opposite party after admitting the Policy being genuine one without raising any objection has paid the amount of Rs 59,812/- only but has not paid the full amount assured i.e. Rs 4,75,000/- and as such, the opposite party has withheld the remaining amount of Rs.4,15,188/- illegally and unlawfully for which the claimant is also entitled. The complainant approached the opposite party many a times and made requests to release/pay the above said remaining amount but they did not listen the lawful and genuine request of the complainant. The above said act of the opposite party amounts to negligence and deficiencies in service and has also caused mental pain, agony and harassment to the complainant. The complainant has prayed as under:-
(i) The opposite party be directed to release the remaining amount of Rs. 4,15,188/- alongwith interest @ 18% pa. thereon.
(ii) A compensation of Rs. 50,000/- on account of mental pain, agony and harassment suffered by the complainant may be granted in his favour and against the opposite party.
(iii) Costs of proceedings of Rs. 5,500/- may be granted in his favour.
3 After formal admission of the complaint, notice was issued to Opposite Party and opposite party appeared through counsel and filed written version and contested the complaint by interalia pleadings that the insured willfully and fraudulently concealed the material facts regarding her health condition at the time of purchase of the insurance policy on 13.02.2015. The insured gave wrong answers to the questions of the personal statement submitted at the submission of the proposal for purchase of insurance product knowing well that those were incorrect and she stated that she is in good health. However as alleged she died on 06.07.2016 i.e. barely within 8 months from the purchase of policy. Being the case of close proximity, the claim was investigated by the opposite party through independent investigators M/s. KLCR Investigations Pvt.Ltd. and as per their report the said investigator concluded as under:
"After doing the investigation on all grounds we want to conclude that the deceased was suffering from BP and Breathing problem for the past 5-7 years and due to this reason, she died. She was under the treatment of Dr. Mohan Singh, Ayurvedcharya, who was providing treatment on OPD basis. The deceased had also one another policy in Birla Sun Life, the policy No. is 006674658 of Rs.8,40,000/-. She did not disclose this policy at the time of taking the Life Insurance policy, hence the case should be repudiated on the above ground.
“Therefore it is evident that the insured was prejudicial to the contents of "Uberrima Fides' which is the basis of all Insurance contracts. Moreover, the fact of ill health and consequent treatment was well within the knowledge of the insured and she was a willful suppression to obtain insurance fraudulently. Had she disclosed history of her pre-existing disease the insurance policy would not have been issued in favour of the insured and hence the insured did not stick to the "Principle of Utmost Good Faith". Therefore on the strength of above factors and recommendations of the Investigations agency, the competent authority of respondent repudiated the liability under the said policy and conveyed to the complainant vide letter vide letter dt.29.1.2017 as void ab initio.
The complainant is debarred to file the instant complaint due to her own act and conduct. The complainant tried to defraud the opposite party and knowingly concealed the health conditions of the insured at the time of submission of the claim which clearly reveals that mala fide intention of the complainant to grab the public money. The insured had willfully and wrongly with ill intention concealed the material facts regarding her health at the time of obtaining the insurance policy and as such the said policy was declared null and void under the provisions of Indian Contract Act, 1872 as well as per the terms and conditions of the insurance contract. The complaint is liable to be dismissed being uncalled for, unwarranted and misuse of the judicial process. The complainant is estopped to file the instant complaint as there is no deficiency in service on the part of the Opposite Party as defined in Section 2(I)(g) of the Consumer Protection Act 1986 under the heading Deficiency. The insurance policy is a 'De Novo' contract i.e. it is a contract of UTMOST GOOD FAITH technically known as "UBERRIMA FIDES". According to this doctrine the proposer who is one of the parties of the contract, is presumed to have means of knowledge, which are not accessible to the opposite party, who is the other party to the contract. Therefore the proposer (life assured) is bound to disclose everything affecting the judgment of the insurer, no matter howsoever unimportant it may seem to him/her (proposer.). In all contracts of life insurance, the proposer is bound to make full disclosure of all the material fact and not merely those, which he thinks material, misrepresentation, nondisclosure or fraud in any document leading to acceptance of the risk automatically discharges the insurer from all liabilities under the contract. At the time of submission of the proposal and statement regarding health for obtaining the insurance policy, the life assured is bound to make full disclosure of all the facts relating to his/her health but the insured deliberately gave false answers to the questions of the proposal form as under:
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| Present occupation details | Self employed/business |
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| | |
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| Gross yearly income from all sources (INR) | 2,50,000/ |
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| Name of the present employer/business | Retail Shop |
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| Do you have any existing insurance cover or premium paying and or paid up policies ? | |
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| Has any application for insurance on your life been declined ? | |
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| Have you ever suffered from: Diabetes/high blood sugar/sugar in urine, High Blood pressure/hypertension,. heart disease, stroke | |
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| During last 5 years have you undergone or been recommended to undergo X-ray or any other investigation (excluding check-ups for employment/) | |
Had she mentioned her true state of health while answering questions of the proposal from the contract of insurance would have not been effected. The complaint against the Opposite party does not lie before this commission under the Consumer Protection Act 1986 with regard to the rejected claim. The matter is also to be decided by a Civil Court at full scale trial requiring the complete pleadings and evidence according to law the summary trial under the Consumer Protection Act, 1986 is not the proper remedy for the complaints. The Opposite party had rightly refused the death claim of the Life Insurance policies of the deceased. In view of the provisions contained in the Insurance Act, 1938 which is a specific statue meant for dealing with the disputes under the contract of insurance the provisions of the Consumer Protection Act 1986 cannot be invoked for dealing with the matter covered by Insurance Act. The amount of Rs.59,812/ paid by the opposite party has been received by the complainant as full discharge of the liability of the opposite party as per terms and conditions of the policy and as such nothing is payable by the opposite party to the complainant. The opposite party has denied the other contents of the complaint and prayed for dismissal of the same.
4 To prove his case, Ld. counsel for the complainant has tendered in evidence affidavit of complainant Ex. C-1 copy of death claim for policy Ex. C-2 and closed the evidence. Ld. counsel for the opposite party tendered in evidence affidavit of Sh. Nitish Bhardwaj Ex. OP1, copy of request for claim form Ex. OP-2, copy of death claim intimation Ex. OP3, copy of application Ex. OP-4, copy of the passport Ex. OP-5, copy of the aadhar Card Ex. OP-6, copy of the doctor certificate Ex. OP-7, copy of the Adhar Card Ex. OP-8, copy of the PAN Card Ex. OP-9, copy of the passport Ex. OP-10, copy of the death certificate Ex. OP-11, copy of the election identity card Ex. Op-12, copy of the policy Ex. OP-13, copy of the consultant confidential report Ex. OP-14, copy of investigation report Ex. OP-15, copy of the important documents Ex. OP-16, copy of the death claim policy Ex. OP-17, copy of the letter Ex. OP-18, copy of the doctor certificate Ex. OP-19.
5 We have heard the Ld. counsel for the parties and have gone through the record on the file.
6 In the present complaint, the complainant mother Smt. Manjit Kaur took insurance policy from OP bearing No.17435483 under the plan HDFC SL ProGrowth -Flexi Vide Proposal dated 13.02.2015 and assured for a sum of Rs 475000/- and the complainant was nominee of the said policy. The complainant mother expired on 06.07.2016 , claim was lodged with the OP by the complainant and supplied all the documents but the OP repudiated the same vide letter dated 29.01.2017 on the false, baseless and flimsy grounds that is – the life assured was suffering from hypertension and having policies with other life insurance.
7 The complainant mother was not suffering from any disease as alleged by the OP. Moreover the other policy issued by Birla Sunlife General Insurance have settled the claim and paid the claim amount to the complainant. Further , OP after admitting the policy being genuine one ,paid amount of Rs 59812/- but has not paid full amount assured i.e. Rs 475000/- . OP stated in their written version that the insured gave wrong answers to the questions of the personal statement submitted at the submission of the proposal for purchase of insurance policy. However insured died on 06.07.2016 barely within 8 months from the purchase of policy. Being the case of close proximity, the claim was investigated by the OP through M/s. KLCR investigations Pvt.Ltgd. and as per their report the said investigator conclude as under :-
“ after doing the investigation on all grounds we want to conclude that the deceased was suffering from BP and breathing problem for past 5-7 years and due to this reason ,she died .She was under the treatment of doctor Mohan Singh ground,Ayurvedacharya ,who was providing treatment on OPD basis. The decreased had also one another policy in Birla Sun Life the policy number is 006674658 of ₹8,40,000. She did not disclose this policy at the time of taking the life insurance policy. Hence the case should be reputed on the above ”.
Further, at the Submission of the proposal and statement regarding health for obtaining the insurance policy the life assured is bound to make full disclosure of all the facts relating to his/ her health but the insured deliberately gave false answers to the question of the proposal form as under :-
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| Present occupation details | Self employed/business |
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| | |
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| Gross yearly income from all sources (INR) | 2,50,000/ |
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| Name of the present employer/business | Retail Shop |
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| Do you have any existing insurance cover or premium paying and or paid up policies ? | |
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| Has any application for insurance on your life been declined ? | |
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| Have you ever suffered from: Diabetes/high blood sugar/sugar in urine, High Blood pressure/hypertension,. heart disease, stroke | |
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| During last 5 years have you undergone or been recommended to undergo X-ray or any other investigation (excluding check-ups for employment/) | |
In view of the above discussion, we are of the considered view that , the claim was repudiated on two grounds :-
- The deceased was suffering from BP and Breathing problem for the past 5-7 years.
- Non disclosure of one another policy in Birla Sunlife.
To prove their point regarding hiding of medical history of the deceased , OP provided the copy of the consultant confidential report (Ex. OP-14) , stated that - Do you have any information of the life to be assured having suffering from any illness or injury or undergo any operation surgery or medical examination in last 5 years , replied as NO . Further , OP submitted the doctor certificate (EX OP7) , but after gone through these documents on record we are of the considered view that, there is nowhere mentioned that the deceased was suffering for high BP and Breathing problem for past 5-7 years . Moreover , on doctor certificate date of first consultation was mentioned as 06.07.2016. Moreover , no Affidavit was placed on record for Dr. Mohan Singh as well as consultant Taranbir Singh . Hence , repudiated the claim on point one was baseless because OP failed to prove its point that deceased had hide the medical history.
To prove the second point ,that is- Non disclosure of the other policy, complainant himself placed on record the copy of death claim from Birla Sunlife (Ex.c-2 ) which clearly stated that :-
Policy No 006674658 Of late Mrs. Manjit Kaur , Rs 8,40,000 credited to bank ICICI Account No. ********8974.
Moreover, OP stated in their written version that , deceased replied as NO , for the question – Do you have any existing insurance cover or premium paying and paid up policies? Further, the complainant stated in their complaint that at the time of the purchase of policy, his mother had not received the insurance policy and was not aware of the policy number. Disclosure of a pre- existing life insurance cover of the proposer is necessary to enable the insurer to assess the human life value of the proposer before the insurance of the policy. The consequences of non disclosure of the pre existing cover is that the insurer is unable to assess the real risk. Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured had in such a short span of time obtained two different life insurance policies. Such a fact is sufficient to put the insurer to enquiry.
8 The Hon’ble Supreme Court of India in the matter of Reliance Life Insurance Co. Ltd. and anr versus Rekhaben Nareshbhai Rathod as reported in II [2019] CPJ 53 (SC) is pleased to hold as under:- The expression material in the context of an insurance policy can be defined as any contingency or event that may have an impact upon the risk appetite or willingness of the insurer to provide insurance cover. In MacGillivray on Insurance Law (Twelfth Edition, Sweet and Maxwell (2012). See Pg. 493 for cases relied upon] it is observed thus:- The opinion of the particular assured as to the materiality of a fact will not as a rule be considered, because it follows from the accepted test of materiality that the question is whether a prudent insurer would have considered that any particular circumstance was a material fact and not whether the assured believed it so Twelfth Edition, Sweet and Maxwell (2012). See Pg. 493 for cases relied upon. Materiality from the insureds perspective is a relevant factor in determining whether the insurance company should be able to cancel the policy arising out of the fault of the insured. Whether a question concealed is or is it not material is a question of fact. As this Court held in Satwant Kaur (supra): Any fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be material Materiality of a fact also depends on the surrounding circumstances and the nature of information sought by the insurer. It covers a failure to disclose vital information which the insurer requires in order to determine firstly, whether or not to assume the risk of insurance, and secondly, if it does accept the risk, upon what terms it should do so. The insurer is better equipped to determine the limits of risk-taking as it deals with the exercise of assessments on a day-to-day basis. In a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not accept the risk is a material fact. If the proposer has knowledge of ZOHRA MALIK VERSUS AEGON RELIGARE LIFE INSURANCE COMPANY PVT. LTD PAGE 7 OF 8 such fact, she or he is obliged to disclose it particularly while answering questions in the proposal form. An inaccurate answer will entitle the insurer to repudiate because there is a presumption that information sought in the proposal form is material for the purpose of entering into a contract of insurance. Contracts of insurance are governed by the principle of utmost good faith. The duty of mutual fair dealing requires all parties to a contract to be fair and open with each other to create and maintain trust between them. In a contract of insurance, the insured can be expected to have information of which she/he has knowledge. This justifies a duty of good faith, leading to a positive duty of disclosure. The duty of disclosure in insurance contracts was established in a Kings Bench decision in Carter v Boehm19, where Lord Mansfield held thus: Insurance is a contract upon speculation. The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; the under writer trusts to his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge, to mislead the under writer into a belief that the circumstance does not exist, and to induce him to estimate the risk, as if it did not exist. It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal from the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement. The finding of a material misrepresentation or concealment in insurance has a (CC-635 OF 2015) ZOHRA MALIK VERSUS AEGON RELIGARE LIFE INSURANCE COMPANY PVT. LTD PAGE 8 OF 8 significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur (supra) (1766) 3 Burr 1905 there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance. Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.
9 Having regard to the discussion done and legal position explained .We are of the considered view that the decision of the opposite party repudiating the claim of the complainant , the insured not having furnished the detail of the policies obtained by her which details , as observed by their lordships in the matter of Reliance life insurance company limited and another versus Rekhaben (supra) are material , the concealment of which amounts to violation of policy ,cannot be faulted with and if that be the case the complaint being devoid of merit is dismissed leaving the parties to bear the cost. 10 In view of the above discussion, we do not find any merit in the present complaint and the same is hereby dismissed with no order as to costs. Copy of order will be supplied by District Consumer Disputes Redressal Commission, Amritsar to the parties as per rules. File be sent back to the District consumer Disputes Redressal Commission, Amritsar. Announced in Open Commission
21.10.2022
