JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          Late Smt. Kaushalya, wife of the complainant obtained an insurance policy from the respondent company on her life, for a sum insured of Rs.3 lacs.  The policy was obtained on 25.08.2008.  She having died on 24.01.2010, a claim in terms of the insurance policy was lodged by the complainant, he being her husband.  The claim was repudiated vide letter dated 25.08.2010, which to the extent it is relevant, reads as under:

In this connection, we have noted that in the proposal for insurance received by us on August 12, 2008 (copy of the proposal form enclosed), relevant questions were answered as follows:

          The above policy was issued on August 25, 2008.  The Life Assured expired on January 24, 2010. 

          After careful evaluation of the records obtained by us, during the claim processing, it is noted that the Life Assured was hospitalized in April 20, 2006 and was diagnosed of Squamous Cell Carcinoma of Oesophagus.  Further, the Life Assured received Radiotherapy and Chemotherapy treatment. 

          This medical history which was prior to proposal was not disclosed in the proposal for insurance.

          Therefore, the answers to Q. Nos.22(a), 23(c),(d), (f) and (h) (xiii) as mentioned above have been found to be false.  Had the above facts been disclosed, the Company would have declined the proposal upfront.  The Company has been led to issue the policy by suppression of material facts by the Life Assured.

          We are therefore constrained to repudiate your claim for the above policy and all monies that have been paid there under belong to us.

2.      Being aggrieved from the repudiation of the claim, the complainant/petitioner approached the concerned District Forum by way of a Consumer Complaint. 

3.      The complaint was resisted by the respondent primarily on the grounds on which the claim had been repudiated. 

4.      The District Forum having allowed the Consumer Complaint, the insurer approached the concerned State Commission by way of an appeal.  Vide impugned order dated 04.02.2019, the State Commission allowed the appeal and consequently dismissed the Consumer Complaint.  Being aggrieved, the complainant/petitioner is before this Commission by way of this Revision Petition. 

5.      I have perused the proposal form submitted by the insured to the respondent company for the purpose of taking the insurance cover on her life.  While filling the proposal form, she was required to answer a number of questions related to her health.  She was required to answer whether she had ever consulted any doctor.  She replied in the negative though admittedly, she had been hospitalized in SMS Medical College and Hospital, Jaipur on 20.04.2006, much before the proposal was submitted.  She was also required to respond whether she had undergone any test, investigation or had been advised to undergo any test, investigation, surgery etc. or had been hospitalized for general check-up, observations, treatment or surveyor.  Again, the answer given by her was in the negative though she had been hospitalized and was advised medication by the doctors of the aforesaid hospital on 20.04.2006.  She was also required to disclose whether she had been ever treated or hospitalized for Cancer, Tumor or Cyst or any other growth or whether she had suffered from Gastritis, Stomach or duodenal ulcer, hernia, jaundice, hepatitis, fistula, piles or any other disease or disorders of the gastrointestinal system.   Again, the answer given by her was in the negative.  The said answer was incorrect as is evident from the discharge report issued by the Medical Officer of SMS Medical College and Hospital, Jaipur which clearly shows that she was suffering from Carcinoma of Mid- Esophagus at the time she was examined in the hospital. 

6.      It is thus evident that the deceased had made concealment with respect to the state of her health and had partly withheld the information that she had been hospitalized at SMS Medical College and Hospital, Jaipur and had been diagnosed with Cancer of Oesophagus.

7.      It is submitted by the learned counsel for the petitioner/complainant that the deceased insured was an illiterate person, she having put her thumb marks on the proposal and the proposal was filled up by the agent who got the insurance cover to her.  Admittedly, the insurance agent was not impleaded as a party to the Consumer Complaint.  In the absence of his impleadment, such an allegation cannot be verified.  Moreover, the complainant having made a solemn declaration in the proposal and having subsequently stated that the contents of the proposal form had been explained to her and she had fully understood them and she having fully satisfied with the replies in the proposal form had been recorded as per the information provided by her, it would be difficult to dispute that she was bound by the answers given to the insurer in the proposal form.  Recently, in Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathod – Civil Appeal No.4261 of 2019, decided on 24.04.2019, the Hon’ble Supreme Court expressly rejected such a contention on behalf of the complainant in a Consumer Complaint involving payment of benefit under an insurance cover where the insured had concealed material information with respect to the state of his health and had alleged that the proposer was unaware of the contents of the form she having assigned the task to a third party.  In Rekhaben Nareshbhai Rathod (supra), the Hon’ble Supreme Court interalia observed as under:-

“26.    …………..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 form 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 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) “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 insurane”. Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.

29.     We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form.  …………..”

8.      For the reasons stated hereinabove, I am in agreement with the view taken by the State Commission.  The Revision Petition, being devoid of any merits, is hereby dismissed with no order as to costs.