Haryana

StateCommission

A/532/2016

UNITED INDIA INSURANCE CO. - Complainant(s)

Versus

LALIT GARG - Opp.Party(s)

NITIN GUPTA

16 Nov 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

         

                                       

First Appeal No  :       532 of 2016

Date of Institution:      10.06.2016

Date of Decision :      16.11.2016

 

1.      United India Insurance Company Limited, 68/1, Janpath, New Delhi -110001, New Delhi through its Branch Manager.

2.      United India Insurance Company Limited, Janpath, Branch Office at Champa Bhawan, Palwal (Opposite Krishan Sweets, Palwal), Tehsil and District Palwal through its Branch Manager.

 

          Both the appellants are now represented through the duly authorized signatory of Regional Office, SCO No.123-124, Sector 17B, Chandigarh.

                             Appellants-Opposite Party No.1

 

Versus

1.      Lalit Kumar Garg son of late Sh. Dharamvir Garg son of Bhajan Lal, resident of Kalra Colony, Near Geeta Bhawan, Palwal, Tehsil and District Palwal.

2.      Vipin Kumar Garg son of late Sh. Dharamvir Garg son of Bhajan Lal, resident of Kalra Colony, Near Geeta Bhawan, Palwal, Tehsil and District Palwal.

Respondents-Complainants

3.      Medsave Health Care (TPA) Limited, Delhi, F-701A, Lado Sarai, Mehrauli, New Delhi -110030 through its Manager.

                                      Respondent-Opposite Party No.2

 

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                          

Present:               Shri Nitin Gupta, Advocate for appellants.

                             Shri Johan Kumar, Advocate for respondents-complainants.

 

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

The instant appeal filed by United India Insurance Company Limited and another-opposite party No.1 (for short, ‘Insurance Company’) calls in question the correctness of the order dated March 11^th, 2016, passed by District Consumer Disputes Redressal Forum, Palwal (for short ‘the District Forum’) whereby complaint filed by Lalit Garg and Vipin Kumar Garg-complainants was allowed. For facilitation, the operative part of the order is reproduced as under:-

“(i)     To pay Rs.1,00,000/- (half share) with interest at the rate of 9% per annum from the repudiation of claim i.e. (15.07.2013) till realization as out of the total hospital bill of Rs.2,00,000/- the other insurance company i.e. M/s Paramount Health Service (TPA) under the corporate mediclaim insurance policy has paid Rs.1,00,000/- i.e. his half share directly to the hospital.

(ii)      To pay compensation for mental agony, tension, harassment, financial loss and wastage of precious time and not providing sufficient services and adopting unfair trade practice to the tune of Rs.5,000/- as well as litigation expenses to the tune of Rs.5500/-.”

 

2.      Dharamvir Garg-since deceased (hereinafter referred to as ‘Insured’)-father of complainants, purchased Tailor Made Group Mediclaim and Personal Accident Insurance Policy (Annexure R) from the Insurance Company.  The sum insured was Rs.2,50,000/-.  The policy was renewed from September 09^th, 2012 to September 08^th, 2013.  The Insured fell ill on July 23^rd, 2012. He took treatment from Metro Heart Institute, Faridabad and remain admitted from July 23^rd, 2012 to July 25^th, 2012.  The total amount spent on the treatment was Rs.2,00,000/-. He paid Rs.1,00,000/- and balance Rs.1,00,000/- was paid by the Insurance Company.  The claim submitted by the insured was repudiated by the Insurance Company.  Aggrieved thereof, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986. 

3.      The Insurance Company, in its written version, denied the averments of the complaint and pleaded that Medsave Health Care (TPA) Limited, Delhi-opposite party No.2 vide letter dated March 15^th, 2013 repudiated the claim of the complainant on the ground that the patient was having pre-existing disease.   

4.      The question for consideration before this Commission as to whether the Insurance Company was justified in repudiating complainants’ claim or not?

5.      The insured purchased the Tailor Made Group Mediclaim and Personal Accident Insurance Policy (Annexure A-1) on September 09^th, 2011.  The policy was renewed from September 09^th, 2012 to September 08^th, 2013.  Prior to the renewal of the insurance policy, Insured was a known case of Coronary Artery Disease (CAD) Unstable Angina Post PTCA with Stenting to RCA as is evident from Discharge Summary (Annexure A-2) of Metro Hearth Institute with Multispeciality, Faridabad.

6.      It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – uberrimae fidei, applicable to both the parties.  The rule of non-disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out facts which would materially affect the risk.  The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries.  A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.” 

7.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

8.      Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

9.      In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that 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.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

10.          On the aforesaid facts and principles enunciated, the right to claim insurance benefits by the complainants does not survive having reference to Discharge Summary (Annexure A-2) issued by Metro Heart Institute, Faridabad. Thus, it stands established to the hilt that the insured was suffering from Coronary Artery Disease, prior to the renewal of the Insurance Policy and he suppressed this fact at the time of renewal of the insurance policy (Annexure A-1). Thus, the District Forum fell in error in allowing the complaint and as such the impugned order cannot be allowed to sustain. The appeal is accepted, the impugned order is set aside and the complaint is dismissed.

11.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced 16.11.2016

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President

UK