ORDER

12.09.2023

MS. NIPUR CHANDNA, MEMBER

1. Complaint under Section 12 of Consumer Protection Act 1986 (hereinafter referred to as act) filed by Mrs. Kumud Aggarwal (hereinafter referred to complainant) seeking claim of amount of Rs.15,00,000/-  with other bonus benefits alongwith interest  18% per annum from 16.08.2012 till realization and Rs.4,00,000/- on account of compensation for mental agony, physical harassment as well as litigation cost to the tune of Rs.55,000/-.

2. In brief facts are that the complainant is the widow of Late. Sh. Gaurav Aggarwal having the life insurance policy of OP Insurance Co. namely Jeevan Mitra (Triple Cover Endowment Plan) with profit (with accident benefits) vide policy bearing no.265042346 for a sum insured of Rs.5,00,000/- against the receipt of the payment of premium of Rs.13,429/- on half yearly basis, the premium has to be paid for 25 years. It is alleged by the complainant that the policy commenced from 28.04.2010 and its date of maturity was 28.04.2035. It is further alleged by complainant that the agent of OP company got sign some blank papers from her husband, her husband was duly examined and then only the policy in question was issued.

3. On 16.08.2012, Mr. Gaurav Aggarwal (husband of the complainan) died due to sudden pain at right side axilla. It is alleged that the complainant husband had never hide any fact regarding his medical fitness from the OP Insurance Co. She further added that even the OP Insurance Co. had also conducted the medical examination at its own before issuing the policy in question and no disease was ever found in the medical examination conducted by OP. It is alleged by the complainant that she lodged the death claim with the OP company but the OP company repudiated the claim vide letter dated 14.02.2013 assigning the false ground that Mr. Gaurav hide the fact of previous history of cancer symptoms at the time of issuance of the policy in question.

4. It is alleged by the complainant that she visited the office of the OP on several occasions and requested the officials to reconsider the claim in question but all in vain. The complainant also wrote letter dated 07.09.2013 for reconsidering the repudiation but of no use. It is further alleged by the complainant that vide letter dated 18.11.2013 OP Insurance Co. came forward with the settlement letter thereby requesting the complainant to accept a sum of Rs.5,00,000/- as ex-gratia amount against the claim in question. The complainant refused the offer of OP, as the OP company is offering the peanut instead of the entire claim of Rs.15,00,000/-  with other bonus benefits for which she is legally entitled.

5. It is alleged by complainant that the arbitrary conduct of the OP in dealing her claim compelled her to knock the door of this commission, hence this complaint.

6. Complaint has been contested by OP. OP filed its WS wherein it denied any deficiency any service on its part. It is further stated  by the OP that the claim in question was repudiated by the OP on the ground of concealment of / untrue replies to the question no. 11 (i) stating as Good, whereas the deceased has taken the treatment from Fortis Escort Hospital. It is further stated that the medical certificate dated 08.10.2012  issued by medical attendant in reply to question no.4 (a) and 4 (b) reveals that the patient was suffering from “Lynphame (T-CGLL Rich) and B-CELL Lynphame, stage 4 with sudden cardiac arrest. It is further stated that as per the certificate issued by Rajiv Gandhi Cancer Institute Hospital, at point no.4 that “came on 02.04.2012 with C/O (R) Axillary swelling for two years increasing in size for one month”. It is further stated that the certificate issued by Escort Hospital as well as by Rajiv Gandhi Cancer Institute clearly establish the fact that the deceased has given false reply to the question no.11 of the proposal form while obtaining the policy in question. It is further stated that the concealment of the fact by the deceased in the proposal form compelled the OP Insurance Co. to reject the claim, however taking the liberal and sympathetic view toward the complainant vide letter dated 18.11.2013, the OP company offered Rs.5,00,000/- as ex-gratia subject to the acceptance of the ex-gratia amount by complainant in full and final satisfaction of her claim arising out of the present complaint, but the complainant refused the settlement offer of the OP and had challenged the repudiation which is justified in view of the above reasoning. It is further prayed that the present complaint case be dismissed with cost being frivolous one.

7. Both the parties have filed their evidence by way of affidavit. Complainant has placed on record the copy of policy document, history sheet, discharge summary of Escort Fortis Hospital, she has also placed on record the copy of death certificate of her husband, copy of repudiation letter dated 14.02.2013, copy of the claim form, certificate of hospital treatment, copy of the representation dated 17.03.2023 to the OP for reconsideration of the claim, copy of the letter dated 18.11.2013 issued by OP as well as the copy of legal notice dated 13.02.2013 in support of her contention.

On the contrary OP counsel has placed on record the copy of proposal form, copy of the medical examination report before issuing the policyin question, copy of the discharge summary of Rajiv Gandhi Cancer Institute, copy of the form no.3784 and 3816 issued and submit by Rajiv Gandhi Cancer Institute to OP company, copy of the statement of complainant as well as the copy of history sheet, discharge summary, MRI report of Escort Fortis Hospital in support of his contention.

8. We have heard the argument advance at the bar and have perused the record.

9. Ld. counsel for the OP has contended that the Life Assured had given false replies in the application for insurance as such the policy was obtained by concealment and suppression of material facts. In support of its contention counsel for OP has drawn our attention towards the proposal form as well as the copies of discharge summary of Rajiv Gandhi Cancer and Research Institute. It was further argued that the claim was rightly repudiated as the policy was obtained by concealment and suppression of material facts. 

On the other hand, ld. counsel for the complainant has contended that there is no concealment of material facts by the Life Assured, and prayed that the relief claims be granted.

10.  It is admitted position that the Life Assured had taken insurance policy, wherein total sum assured was Rs.5,00,000/- from the OP on 28.04.2010. The Life Assured died on 16.08.2012. Claim has been repudiated by the OP on the ground that the Life Assured was suffering from Cancer, for which he was on medication from last 2 years as disclosed from the medical record of Rajiv Gandhi Cancer and Research Institute. It was alleged that the Life Assured had given false replies in the application for insurance as such the policy was obtained by concealment and suppression of material facts.

11. To prove the aforesaid contention, OP has relied upon the queries answered by the Life Assured in the proposal form. The relevant portion of the same is reproduced as under: ,

                    ख) क्या आप को कभी जांच , देख भाल, उपचार या किसी प्रकार अल्प   

                          चिकित्सा के लिए किसी अस्पताल या सेवा गृह में दाखिल किया गया है – No

                    ड) क्या आप मधुमेह ,क्षय ,उच्च / निम्न रक्त चाप ,नासूर ,मिर्गी ,आत उतरना ,पोतो  का

                         बढ़ना अथवा किसी अन्य रोग से पीड़ित रहे है या इस समय पीड़ित है ? No

• ) सामान्यतः आप का स्वास्थ की स्तिथि कैसी रही है? Good

In the MECR report the life assured at point no.5 which is reproduced as under has given the following answers to the queries of Medical Examiner:

a) was hospitalized No

b) was operated No

c) met with accidentNo

d) has undergone any biochemical,No

radiological, other test

e) is currently under any treatmentNo

12.  OP has relied upon documents collected during the investigation of the claim by it. There is discharge summary of Life Assured issued by Rajiv Gandhi Cancer and Research Institute showing that Life Assured remained admitted in aforesaid hospital. The bare perusal of the discharge summary and its para short clinical synopsis shows that LA is presented with the C/O right axillary swelling since 2 years, it is further directed in the discharge summary to continue medication for hypertension, diabetes, hypothyroidism other accompanying diseases as advised by your cardiologist/physician.   

13. The aforesaid discharge summary shows that the Life Assured was not only suffering from Cancer but with the hypertension, diabetes, hypothyroidism other accompanying diseases prior to the issuance of the policy in question. It is pertinent to  mention here that the complainant has not approached this  commission with clean hands rather the complainant had not intentionally placed on record the copy of discharge summary of Rajiv Gandhi cancer hospital and has conceal the truth of pre existing ailments from this commission also. The material on record clearly shows that the Life Assured had not given correct answers and had obtained the policy by suppressing material facts.
14. The contracts of insurance are contracts of uberrima fides and every material fact is required to be disclosed.

“In United India Page 11 of 13 Insurance Co. Ltd. v. M.K.J. Corpn., III (1996) CPJ 8 (SC), a two Judge Bench of Hon‟ble Supreme Court has observed: “It is a fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, „similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured”.

“In Satwant Kaur Sandhu v New India Assurance Company reported in IV (2009) CPJ 8 (SC), Hon‟ble Supreme Court has observed that in a contract of insurance, the expression “material fact” is to be understood in general terms, to mean as any fact which would influence the mind 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 its 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– uberrimae fidei. 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 Page 12 of 13 fact and his believing the contrary. 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”.

“In PC Chacko and Anr. v. Chairman, Life Insurance Corporation of India & Ors. (2008) 1 SCC 321, the Hon‟ble Supreme Court has upheld the repudiation of the contract of insurance on the ground of non-disclosure and mis-statement in the proposal form to the various questions to which the answers were given by the insured”.

15.  In the present case, the material on record discussed above clearly establishes that the Life Assured had concealed material facts about his health in the proposal form as well as in Medical Examiners Report. The Life Assured had failed to disclose that he was suffering from Cancer, hypertension, diabetes, hypothyroidism other accompanying diseases prior to the issuance of the policy in question. Further, when the application for insurance was filled up by Life Assured and the MER form was filled up and he had replied questions in respect of aforesaid ailments in negative. There is clear suppression of material facts in relation to diseases suffered by him prior to date of application for insurance. Even in Medical Examination’s Report, the Life Assured had replied in negative to the questions about his past medical history. Material on record shows that policy was obtained by concealment of material facts. In the facts and circumstances of the present case, the OP was justified in repudiating the present claim.
16. In view of the above discussion as well as judgment cited above we find no merits in the present complaint same is hereby dismissed.

Copy of the order be given to the parties free of cost as per order dated 04.04.2022 of Hon’ble State Commission after receiving the application from the parties in the registry.

Order be uploaded on www.confonet.nic.in.

Pronounced on 12.09.2023

Sanjay Kumar                Nipur Chandna                      Rajesh

President                                Member                            Member