1.      This Revision Petition has been filed under Section 58(1)(b) of the Consumer Protection Act, 2019 (the “Act”) against Order dated 23.03.2021, passed by the State Consumer Disputes Redressal Commission, Rajasthan (‘State Commission’) in FA No. 1231/2019. In the impugned Order, the State Commission dismissed the Appeal of Complainant and upheld the decision of the District Consumer Disputes Redressal, Forum, Jaipur-III (‘District Forum’) dated 03.09.2019 in CC No. 586/2014 (Old No. 972/2013) - Bhuvnesh Gupta v Life Insurance Corporation of India etc.

2.      As per the report of Registry, there is 319 days delay in filing the Appeal. For reasons stated in IA/4946/2022 and delay occurred during the suspended period of limitation on account of Covid-19, this Revision Petition is treated to have been filed within limitation.

3.      For the convenience, the parties are referred to as placed in the original Complaint filed before the District Forum.

4.    Brief facts of the case, as per the complainant, are that his wife, Smt. Renu Gupta, had obtained a 'Jeevan Anand' Insurance Policy on 26.10.2010 for Rs. 4,00,000/- from Opposite Party (OP) No. 1, where the complainant was the nominee. On 18.03.2011, his wife was admitted to Apollo Hospital, Ludhiana with complaints of cough and fever. As per the discharge summary, she was 34 weeks pregnant. On 20.03.2011, she gave birth to a child. After discharge from Apollo Hospital, she was admitted to Saket Hospital, Jaipur, on 31.03.2011. During the course of her treatment, she passed away on 25.04.2011 due to swine flu. Post her death, the complainant had preferred a claim. the OP (LIC) repudiated the claim on the grounds that the insured had misrepresented facts concerning her pregnancy and menstruation while filling the insurance proposal, though the pregnancy was allegedly unknown at that time. He sought release of the insurance policy amount from the Opposite Parties.

5.    The OPs, in their reply, asserted that the insurance policy had been issued by the New Delhi branch, and therefore, this Forum did not have territorial jurisdiction. They contended that on 18.03.2011, at the time of his wife's admission to Ludhiana hospital, she was 34 weeks pregnant. It was alleged that the complainant's wife, being the insured, had obtained the insurance policy by concealing material facts regarding her pregnancy and menstruation. As a result, due to the violation of the terms of the insurance policy, the complainant's claim had been lawfully rejected in accordance with the rules.

6.    The learned District Forum vide Order dated 03.09.2019, dismissed the complaint with the following directions:

“11. As per the above discussion, the Insured Wife of the Complainant while filling the Insurance Proposal Form has concealed the facts regarding her pregnancy and menstruation and due to this reason Opposite Party has rejected the claim of the Complainant which is not a defect. Resultantly, the Complaint of the Complainant against the Opposite Parties is dismissed.”

7.      Being aggrieved by the District Forum order, the complainant filed Appeal No. 1231/2019. The State Commission vide Order dated 23/03/2021 dismissed the appeal and upheld the Order passed by the District Forum, with the following observations:

“13. Thus, as per the above discussion, based on facts and evidence the Ld. District Consumer Forum has passed a critical judgment in which there is no record basis to interfere. Resultantly, the appeal presented by the Appellant-Complainant against the Respondent-Opposite Parties is liable to be dismissed.

ORDER

The Appeal presented by the Appellant-Complainant against the Respondent-Opposite Parties is dismissed and the decision dated 03.09.2019 passed by the Ld. District Forum, Jaipur-III in Complaint No. 586/2014 (Old No. 972/2013) - Bhuvnesh Gupta v Life Insurance Corporation of India etc. is being upheld.”

8.      Dissatisfied by the Order of the State Commission, Complainant filed the present Revision Petition before this Commission praying:

“I. To call for case record of the Rajasthan State Consumer Disputes Redressal Forum, Jaipur in First Appeal No. 1231 of 2019 in the matter titled as "Bhuvnesh Gupta v LIC & Ors.

Il. To set aside and quash the judgment and order dated 23.03.2021 passed by Rajasthan State Consumer Disputes Redressal Forum, Jaipur in First Appeal No. 1231 of 2019 in the matter titled as "Bhuvnesh Gupta v LIC & Ors."

III. To grant any other relief and/or pass any other order (s) that this Hon'ble Commission may deem fit and proper on the facts and in the circumstances of the case.”

9.      The learned counsel for the complainant reiterated the facts and contended that the State Commission erred by not recognizing that there had been no concealment by the Insured, either wilful or otherwise. At the time when she submitted Insurance Proposal, it was plausible that she did not know her pregnancy, negating any scope of deliberate omission. The insured had fully and truthfully answered all questions in the Proposal Form and fulfilled her duty to disclose material facts. She was not required to speculate or volunteer information that was not known. The State Commission failed to consider that she learnt of her pregnancy only later. The burden of proving her knowledge was on the insurer. He argued that medical evidence showed that bleeding at early pregnancy stage may be mistaken as menstruation and early pregnancy typically needs confirmation. Given complications she went through leading to premature delivery, it was certainly conceivable that the insured misinterpreted early symptoms. He further argued that the insured’s death had resulted from swine flu and not pregnancy. Concealing pregnancy would not have benefitted her, nor was it likely to have influenced the insurance outcome. Averring that established legal principles affirmed that an innocent lack of awareness did not void an insurance policy. He referred to medical literature and Birla Sun Life Insurance Co. Ltd. & Anr. v. Ettedi Gangamma, Revision Petition No. 3363 of 2017 (26.09.2023); LIC v. Mamta Sipani, Revision Petition 1033 of 2008 (02.03.2022); Mrs. Padmavathi Ambil v. M/s Max Bupa Health Insurance Company Ltd, CC No. 121/2017 (03.05.2019); Lachman Sarup v LIC, Revision Petition No. 42 of 2013 (04.02.2019); Neelam Chopra v. LIC & Ors., Revision Petition No. 4461 of 2012; V Metropolitican Life Ins Co; 1928 SCC OnLine US SC 122 (21.05.1928); and Penn Mut Life Ins Co. v. Mechanics' Savings Bank & Trust Co.; 73 F 653 (14.04.1896)

10.    The learned counsel for OPs reiterated the arguments made previously before both the fora. He argued that the insured, as part of standard procedure, completed a proposal form, indicating she was not pregnant and listed her last menstruation date as 02.10.2010. However, on 18.03.2011, after being admitted to Apollo Hospital with the complaints of cough and fever, she was also 34 weeks pregnant, with estimated last menstrual period of 24.07.2010 and an expected delivery date of 30.04.2011. She had also signed a declaration in the insurance proposal confirming that her answers were truthful and complete. The contract of Insurance was one of utmost good faith and the insured was bound to answer the questions truthfully and relied upon Bajaj Allianz Life Insurance Co. Ltd. v. Dalbir Kaur, (2021) 13 SCC 553, and P.C. Chacko v. LIC of India, (2008) 1 SCC 321.

11.    I have examined the pleadings and other associated documents placed on record, including the orders of the District Forum and the State Commission and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.

12.    The main issue to be determined is, with due regard to the answers of the insured to the specific questions with respect to her health/medical conditions in the proposal form, whether the complainant is entitled to claim against the death of the deceased life insured (DLI), who died due to swine flu?

13.    Admittedly the deceased insured Renu Gupta, had obtained a 'Jeevan Anand' Insurance Policy No. 333147014 on 26.10.2010 for Rs. 4,00,000/- from OP-1. The complainant’s argument is that that there was a very good possibility that the insured was not even aware of her pregnancy. The expected date of delivery was 30.04.2011 while her baby was delivered on 25.03.2011. On the other hand, OPs asserted that the insured died on 25.04.2011 due to swine flu. The claim filed was repudiated by the OPs on 06.11.2012, stating that Renu Gupta had stated wrong facts regarding her pregnancy and menstruation in the proposal form, violating policy conditions. As the she had not disclosed about her pre-existing condition of pregnancy, he is not entitled to any claim under the insurance policy.  

14.    Insurance contracts are special contracts based on the general principles of voluntary full disclosure in as much as a person seeking insurance is bound to disclose all material facts relating to the risk involved. Law demands a higher standard of good faith in matters of insurance contracts which is expressed in the legal maxim “uberrima fides”, i.e., utmost good faith. This duty of disclosure is codified in Section 45 of the Insurance Act, 1938 which prohibits any insurance contract being called into question after two years, except where good faith obligations are violated. The insured has duty to the insurer to disclose all material facts, and vice-versa, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must conform to the statements in the proposal form or prospectus, or those representations made through his agents. Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the parties towards each other. At the same time, it is to be noted that her death on 25.04.2011 was due to swine flu, which is entirely independent of independent of her pregnancy i.e. the fact allegedly hidden.

15.    The Hon’ble Supreme Court in the case of Sulbha Prakash Motegaonkar, Civil Appeal No.8245 of 2015, decided on 05.10.2015. has held as under:

“We have heard learned counsel for the parties. It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischemic heart disease and also because of myocardial infarction. The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim. We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified. Accordingly, we set aside the order passed by the National Commission and allow the appeal. The respondent will accept the claim made by the appellants within a period of four weeks from today and make the due payment.”

16.    Further, in Om Prakash Ahuja versus Reliance General Insurance Co. Ltd., 2023 LiveLaw (SC) 509, the Hon’ble Supreme Court it has held as under:

“26. The ground on which renewal of insurance policy to the appellant is sought to be refused is that while taking the initial policy, the appellant had failed to disclose that his wife (now deceased) was suffering from rheumatic heart disease. Though she expired of cancer. The fact remains that the first policy was taken by the appellant for the period from 07.07.2007 to 06.07.2008, which was renewed for another year. The claims even for the 6 period, wherein valid policy was available with the appellant, were repudiated. Renewal of policy beyond 07.07.2009 onwards was refused relying upon the guidelines issued by the Insurance Regulatory and Development Authority vide communication dated March 31, 2009. The claim of the appellant was repudiated on that very ground namely nondisclosure of the disease by which the wife of the appellant (now deceased) suffered at the time of purchase of initial policy. The repudiation of claim by the insurance company was subject matter of consideration before the Fora at different levels under the Consumer Protection Act, 1986. The rejection of the claim on the ground that there was concealment of certain material facts by the appellant at the time of purchase of policy, was not found to be tenable and the insurance company was directed to reimburse the expenses incurred for the period from 07.07.2007 to 06.07.2009. The aforesaid amount was paid by the insurance company. The order passed by the National Commission was not challenged any further by the Insurance Company. From this, it is established that even the Insurance Company accepted the fact that non-mentioning of the disease from which the deceased wife of the appellant suffered at the time of purchasing the policy was not material, as the death was caused from a different disease all together. Both had no relation with each other. Now, the insurance company cannot be permitted to raise same plea to deny renewal of insurance policy to the appellant for the period from 07.07.2009 onwards. Even though direction was given by the District Forum vide order dated 11.09.2009 to renew the policy further but it was not renewed, till such time interim order was passed by the National Commission on 13.05.2011.”

17.    It is undisputed that the deceased life insured had paid the premium regarding the life insured and the policy was valid as on the date of her death. It is also undisputed that the life insured did not mention of her pregnancy in the proposal form. At the same time, while the proposal form was filed by Smt. Renu Gupta on 26.10.2010, she was admitted to Apollo Hospital, Ludhiana with complaints of cough and fever on 18.03.2011. At that time, she was 34 weeks pregnant, with an estimated last menstrual period of 24.07.2010. On 20.03.2011, she gave birth to a child. After discharge from Apollo Hospital, she was admitted to Saket Hospital, Jaipur, on 31.03.2011. During the course of her treatment, she died on 25.04.2011 due to swine flu. Therefore, she was admitted as 34 weeks pregnant on 18.03.2011 and she delivered a premature baby two days later. As on the date of preferring the proposal form she was about three months pregnant. It is an asserted position of the complainant that her pregnancy was not confirmed. There is no evidence to the contrary. Therefore, as per established law the benefit of doubt, if any, goes to the insured. Notwithstanding the same, in any case, while the ground for repudiation is the reply to a question in the proposal form pertaining to her pregnancy, the reason for her death was due to swine flu, which has no relation to her pregnancy. Therefore, in my considered view the complainant is entitled the claim regarding the death of the life insured.

18.    In view of the foregoing deliberations, it is evident that the learned State Commission order dated 23.03.2021 in Appeal No. 1231/2019 as well as the District Forum order dated 03.09.2019 in C.C. No.586/2014 (Old No.972/2013) suffer from material irregularity. Therefore, the same are set aside. Consequently, the Revision Petition No.660 of 2022 is allowed and the respondent insurance company is directed to pay the sum insured under the insurance policy in question to the complainant along with interest @ 9% per annum from the date of filing of the complaint before the District Forum till full realization, within one month from the date of this order. In the event of default, the interest payable shall be @ 12% per annum. The Respondent Insurance Company is also directed to pay a litigation cost of Rs.25,000/- to the Complainant.

19.    All pending applications, if any, are disposed of accordingly.