This revision petition has been filed by the petitioner Birla Sun Life Insurance Co. Ltd. against the order dated 06.04.2017 of the State Consumer Disputes Redressal Commission, Andhra Pradesh, (in short ‘the State Commission’) passed in first appeal No.307 of 2015.

2.      Brief facts of the case are that on 17.07.2012 the petitioner/ opposite party issued policy to the father of the respondent/complainant  for a term of 19 years for sum assured of Rs.10,00,000/-. Death of the life assured occurred on 14.03.2013.  Respondent lodged claim with the petitioner.  Investigation under clause 8(3) of IRDA Regulations, 2002 discovered that the Deceased Life Assured (DLA) failed to disclose information about the past insurance history other than the life insurance policy issued by Reliance Life Insurance Company for Rs.6,00,000/-. Claim was repudiated by the Insurance Company vide their letter dated 24.12.2013 on the ground that full information in respect of other policies was not provided in the proposal form.  The complainant filed a consumer complaint before the District Consumer Disputes Redressal Forum Srikakulam, (in short the ‘District Forum’), which was allowed vide its order dated 30.12.2014 as follows:-

“In the result, complaint is allowed, directed the opposite parties No.1 to 3 jointly and severally to pay the assured sum of Rs.10,00,000/- (Rupees ten lakhs only), besides compensation of Rs.5,000/- (rupees five thousand only) and litigation charges of Rs.2,000/- (rupees two thousand only) including the advocate fee of Rs.1000/- to the complainant, within one month 15 days from this day.  If the opposite parties fail to comply the above order within one month 15 days, the opposite parties fail to comply the above order within one month 15 days, the complainant is entitled to get interest @ 9% per annum on the award amount from the date of filing of this complaint i.e., 28-05-2014 till the date of realization.”

3.      Aggrieved with the above order of the District Forum, the opposite party/petitioner filed an appeal before the State Commission, which was dismissed vide its order dated 06.04.2017.

4.      Hence the present revision petition.

5.      Heard the learned counsel for the parties and perused the record.  Learned counsel for the petitioner stated that in the proposal form, the DLA did not give the correct information in respect of the other policies, which were taken by the DLA.  There is mention of one policy of Reliance Life, which was for Rs.6,00,000/-. The income of the DLA was mentioned as Rs.2,00,000/- p.a.. Based on this information, the petitioner insurance company issued the policy in favour of the DLA.  After the death of the DLA on 14.03.2013, the matter was investigated and it was found that the DLA was also having the policy from Kotak Mahindra Life Insurance for a sum of Rs.12,00,000/-, which commenced in the year 2011.  It was stated by the learned counsel that, had the correct information of policies already taken by him been given in the proposal form, looking at the annual income of insured, Insurance Company may not have agreed to give the insurance to the DLA.   Suppression of material information like this disentitles the complainant to get the benefit under the policy.  To support her arguments, learned counsel relied upon the judgment of Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd. and Ors. Vs. Rekhaben Nareshbhai Rathod, AIR 2019 SC 2039, wherein the following has been held:-

“27 In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued a life insurance cover despite the earlier cover of insurance is a decision which was required to be taken by the insurer after duly considering all relevant facts and circumstances. The disclosure of the earlier cover was material to an assessment of the risk which was being undertaken by the insurer. 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.

 6.     Apart from the above judgment, the learned counsel also relied upon another judgment of the Hon’ble Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., 2009 INDLAW SC 856, wherein the following ratio has emerged:-

“………Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment.”

7.      On the other hand, learned counsel for the respondent/complainant stated that the proposal form was filled by the agent and the complainant has given all the information to the agent and the agent missed out the information regarding Kotak Mahindra Life Insurance policy.  The insured did not have intention to suppress this information as the insured had already given information in respect of other policy issued by the Reliance Life Insurance Company for Rs.6,00,000/-.  It was further contended by the learned counsel for the respondent that in the judgment relied upon by the learned counsel for the petitioner in the matter of Reliance Life Insurance Co. Ltd. and Ors. Vs. Rekhaben Nareshbhai Rathod (supra), the insured suppressed material information in respect of pre-existing disease also whereas, in the present case, there is no allegation against the DLA that the complainant suppressed information in respect of any pre-existing disease, therefore, the judgment of the Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd. and Ors. Vs. Rekhaben Nareshbhai Rathod (supra) is not applicable in the present case.

8.      The learned counsel for the respondent further stated that when the DLA has paid all the premiums of the policy before his death, the assertion of the Insurance Company that due to low annual income of the respondent he may not have been able to pay for the premium and therefore, the insurer may not have issued the insurance policy seems only imaginary.  A case cannot be decided on the imaginary grounds of a party.  The learned counsel further stated that in Baleshwar Singh Vs. Life Insurance Co. & Ors., 2017 SCC OnLine NCDRC 83, this Commission has held the following:-

“8.       The facts on record make it very clear that the insured died on 18.08.2000 due to snake bite and not on account of any other disease.  The main contention raised by the OP LIC says that the insured deliberately concealed the factum of obtaining the previous policy, as he wanted to avoid his detailed medical examination, while taking the second policy.  This contention on the part of the OP LIC is, however, without force, because the insured did not die on account of any other disease etc.  Had the insured died because of any other disease and the said disease had not been disclosed to the LIC at the time of obtaining the insurance policy then it could have been stated that there was a suppression of material information on his part.  There is also no evidence that the insured was suffering from any other disease etc.  The State Commission has rightly held that there was no nexus between the cause of death and suppression of a fact.”

 9.     Relying on the above decision of this Commission, learned counsel argued that there is no allegation of the Insurance Company for concealing any material information in respect of the health of the insured. In respect of the previous policies, insured had already given information in respect of one policy taken from the Reliance Company, however, information in respect of other insurance policy from Kotak Mahindra Life Insurance Company was missed out in the proposal form by the mistake of the agent, who filled the proposal form.  This suppression of information cannot be treated as something which would disentitle the complainant of the total insurance claim.  

10.    I have considered the rival arguments of both the parties and have examined the material on record.  The question involved in the present revision petition is whether the Insurance Company is entitled to repudiate the claim only on the ground of suppression of material information in respect of other policies taken by the insured.  It is admitted that the annual income of the insured was only Rs.2,00,000/- and he had already two insurance policies, one from Reliance Life Insurance Company for Rs.6,00,000/- and other from Kotak Mahindra Life Insurance for Rs.12,00,000/-.  The insured again took a policy from Birla Sun Life Company for Rs.10,00,000/-.  Clearly annual income of Rs.2,00,000/- cannot be sufficient for sustenance of three policies.

11.    It is true that this Commission allowed the claim of the complainant in Baleshwar Singh Vs. Life Insurance Co. & Ors. (supra) because the missed out policy in the proposal form was of roughly of the same amount Rs.2,00,000/- as the policy in question which was for Rs.2.25 lakhs.  Both the policies were issued by the same Insurance Company i.e. LIC of India.  The present case is totally different and all three policies have been obtained by the insured from the different insurance companies and they are for large amounts looking at the annual income of the insured. Though the insured has given information in respect of policy issued by the Reliance Company for Rs.6,00,000/-, however, the information of other insurance policy for Rs.12,00,000/- from Kotak Mahindra Insurance Company was not given in the proposal form.  The assertion of the respondent that the proposal form was filled by the agent cannot give any benefit to the complainant because the proposer/insured has signed the proposal form and has verified that all the information given in the proposal form is true.  Clearly, I agree with the assertion of the learned counsel for the petitioner Insurance Company that had the information been given in respect of other policy also, the petitioner Insurance Company may not have issued the insurance policy in favour of the insured as sustainability of the third policy with an annual income of Rs.2,00,000/- would not have been found to be feasible. The Hon’ble Supreme Court in the matter of Reliance Life Insurance Co. Ltd. and Ors. Vs. Rekhaben Nareshbhai Rathod (supra) has clearly held that if the information about previous policy is not given in the proposal form, the insurer cannot assess the real risk in the proposal.  As the information in respect of major policy, which was for Rs.12,00,000/- was not given in the proposal form, clearly, the Insurance Company did not have the correct appreciation of risk involved and issued the policy under the wrong risk assumption.  Had the full information been given in the proposal form, the Insurance Company might not have accepted the proposal.  The decision of the Hon’ble Supreme Court  in Reliance Life Insurance Co. Ltd. and Ors. Vs. Rekhaben Nareshbhai Rathod is fully applicable in the present case, so far as the suppression of information of earlier policy is concerned.

12.    Coming to the assertion made by the learned counsel for the respondent that the proposal form was filled by the agent and the agent missed out the information in respect of Kotak Mahindra Insurance Policy, the Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd. and Ors. Vs. Rekhaben Nareshbhai Rathod (supra) has observed that this assertion cannot be accepted.  Hon’ble Supreme Court observed the following:-

“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.  Barely two months before the contract of insurance was entered into with the Appellant, the insured had obtained another insurance cover for his life in the sum of Rs.11 lakhs.  We are of the view that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitled the insurer to repudiate the claim under the policy.”

13.    Based on the above discussion, the revision petition no.2218 of 2017 is allowed and the order of the State Commission dated 06.04.2017  and order dated 30.12.2014 of the District Forum are set aside and complaint is dismissed.