Complainant/petitioner’s husband had taken a life insurance policy from the respondent for a sum of Rs.50,000/-, which came into force from 30.3.1991.  Insured died on 7.11.1994.  Policy had lapsed twice and the respondent had got it revived on 30.6.1992 as well as on 11.1.1994.  Petitioner submitted his claim to the respondent insurance company, which repudiated the same on the ground that at the time of taking of the policy as well as at the time of its revival, the insured did not reveal the correct state of his health.  Aggrieved by this, petitioner filed a complaint before the District Forum, which was allowed. 

District Forum directed the respondent to pay a sum of Rs.50,000/- towards the insured amount along with interest at the rate of 12% per annum.  Rs.2,000/- were awarded by way of compensation and Rs.1,000/- as costs.

Being aggrieved, respondent filed an appeal before the State Commission.  State Commission reversed the order passed by the District Forum and held that the insured was guilty of suppression of facts.  For coming to this conclusion, State Commission recorded the following reasons :

“For proper analysis of the complaint, we have perused the repudiation letter dated 30.3.95 in minute details.  From the letter, it becomes clear that the claim of the complainant has been repudiated for withholding material information by the deceased regarding his health at the time of effecting the insurance policy as well as the time of effecting the insurance policy as well as at the time of revival of the policy on 30.6.92 and 11.1.94.  therefore the main issue to be decided in this case is whether the life insured suffered from any disease at the time of taking the insurance policy or at the time of revival of the lapsed policy, which was concealed from the appellants/OPs?  In this context, there are three relevant documents, which are on file.  The first document is the discharge slip given by the Medical College and Hospital, Rohtak wherein under the column ‘case summary’, it has been categorically stated that the deceased; a male of 35 years was a chronic smoker suffered from R.H.D. with M.S. with M.R. for 4 to 5 years.  It has also been recorded under this column that the deceased had a history of increasing breathlessness for 2 to 3 years, which increased to Grade III-IV during the last month.  This is a document, which has been provided on file by the Respondent/complainant herself.  The contents of this document have not been challenged or rebutted.  As per this document, it is quite clear that the life insured suffered from R.H.D., M.S. and M.R. for the past 4 to 5 years.  The discharge date being 4.11.1994, as per this document, the deceased suffered from this ailment w.e.f. 1989-1990.  It also appears that while taking into consideration the illness of the deceased, based on this document, the learned District Forum has erred and has probably taken into account the remarks regarding breathlessness wherein it has been stated that the deceased had a history of a progressively increasing breathlessness for 2 to 3 years.  Thus, in our considered view, the learned District Forum has erred in coming to the conclusion about the onset of the disease of R.H.D. with M.S. with M.R. in the case of the deceased.  This document of Medical College and Hospital, Rohtak clearly establishes that the sickness of the life insured had the onset in the year 1989-90 and the same was not disclosed to the approved doctor of the Appellants/OPs at the time of taking the policy and the same was also not disclosed in the proposal form.

The other two documents pertaining to this point are Annexures II and III of the written statement the Appellants/OPs filed in the complaint case.  Annexure II is the revival form dated 30.6.92 and Annexure III is the revival form dated 7.1.1994.  In both these documents, the life insured had stated to be in good health whereas the discharge slip of Medical College and Hospital, Rohtak dated 4.11.1994 categorically states that the patient was suffering from R.H.D., M.S. and M.R. for the past 4 to 5 years and was also suffering from progressively increasing breathlessness for the past 2 to 3 years.  It is quite difficult to believe that the life insured who was suffering from such serious disease did not have any knowledge of the same.  It is, therefore, quite clear that he willfully concealed the fact about his sickness twice from the Appellants/OPs at the time of revival of policy i.e. on 30.6.92 and 11.1.94.”

However, while reversing the order of the District Forum, State Commission directed the respondent to pay Rs.20,000/- to the complainant as ex gracia payment.  Counsel for the respondent states that the sum of Rs.20,000/- as ex gracia has already been paid to the complainant.  Reading of para 13 and 14 of the finding recorded by the State Commission clearly show that the insured was guilty of suppression of material facts at the time of taking of the policy as well as at the time of revival of the policy.  At the time of revival, fresh declaration is taken on the basis of which new contract is entered into.  Respondent was suffering from Rheumatic Heart Disease for 4-5 years prior to his death, which clearly shows that he failed to disclose this fact while filling the declaration at the time of taking the policy as well as getting it revived.  No ground for interference is made out.  Dismissed.