1.      The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 16.04.2015 passed by the State Consumer Disputes Redressal Commission, UP, Lucknow (“the State Commission”), in CC No. 110 of 2002 wherein the State Commission dismissed the Complaint.

2.      For Convenience, the parties in the present matter being referred to as mentioned in the Complaint before the State Commission. “Om Prakash Upadhyay” is identified as the Complainant (Appellant herein) is the father and nominee of Pankaj Kumar Upadhyaya (Deceased Life Assured- DLA). Meanwhile, "Life Insurance Corporation of India" (LIC) and Senior Divisional Manager are referred to as the Opposite Parties (OP - Respondents) / Insurer.

3.      Brief facts of the case, as per the Complainant, as that his son, Mr. PK Upadhyaya (DLA) has obtained 'Ashadeep-II', LIC Policy No. 2818537676, dated 14.12.1997, from the OP, against a deposit sum of Rs.2028/-. The policy had sum assured of Rs.2,00,000/- for 25 yrs term, commencing from 28.03.1998 to 28.03.2023. The quarterly premium payable was Rs.1,977/- and paid until 15.06.1998, the second quarterly premium. Additionally, the Complainant obtained another 'Bima Kiran' policy No. 281853742for the DLA, with sum assured Rs.2,00,000/- and risk cover from 28.05.1998 to 28.05.2008. The half year premium payable Rs.838/- was paid till 07.01.1999 i.e. the second half-yearly premium. Tragically, during the policy period, the DLA fell suddenly ill and was initially treated at Govt Primary Health Centre, Mayorepur. Subsequently, he was referred to SGPGI, Lucknow and he underwent open-heart surgery on 14.08.1998. Following some complications, including a kidney problem, he was again referred to SGPGI, Lucknow and readmitted on 30.12.1998. Sadly, the DLA died on 09.01.1999 due to a heart attack during treatment. The Complainant promptly notified the OPs of the DLA's demise and filed an insurance claim. However, OP repudiated the claim on 23.10.1999, alleging concealment of material facts and providing incorrect information at the time of submitting the proposal for the policies.

4.      Aggrieved by the claim repudiation and alleged deficiency in service by the OP, the Complainant filed a complaint before the District Forum, Sonbhadra, in 2000. The District Forum returned the Complaint on 17.06.2000 with permission to file the same before State Commission, which had jurisdiction. Consequently, he filed CC No. 110 of 2002 in State Commission seeking all benefits arising from both the said policies, and expenses incurred for the DLA's medical treatment at 18% interest and Rs.40,000/- towards harassment and mental agony.

5.      In reply, the OP/Insurer-LIC contended that the DLA had obtained a Policy titled 'Asha Deep II' (Medi-Claim Policy) No. 281853676 for a term of 25 years with a sum assured of Rs.2,00,000/-. The premium payable quarterly was Rs.1,977/-. However, the DLA paid only two premiums for March and June 1998. Subsequently, no premiums were deposited for September and December 1998, resulting in the policy lapsing. The DLA passed away on 09.01.1999. It was asserted that he never received the policy during his lifetime, rendering nothing payable to the Complainant. Further, it was revealed that the DLA also acquired another policy, 'Bima Kiran', No. 281853742, for sum assured of Rs.2,00,000/- for a term of 30 years on 29.04.1998. The half-yearly premium payable was Rs.843.30/-. However, he paid only the first premium of Rs.838/- on 29.04.1998. The subsequent premium due in October 1998 was not deposited, and after a grace period of 30 days, the policy lapsed. The Complainant deposited the premium for October 1998 on 07.01.1999, along with late fees, further contributing to the lapse of the policy. Thus, the OP/ Insurer-LIC repudiated the claim of the Complainant, citing non-payment of premiums leading to policy lapses, and asserted that the complaint was not maintainable and should be dismissed.

6.  The State Commission vide order dated 16.04.2015 dismissed the complaint with the following findings /reasons:

“In the light of the entire scenario of the facts of this case as well as the law laid down by the Hon’ble Supreme Court and Hon’ble N.C.D.R.C. in various cases we have found here in this case before us that the factum of diseases of the insured is found established at the time of admission in the hospital and treatment of the deceased who fell suddenly ill and was got admitted in Primary Health Centre Myorepur, wherefrom he was referred for treatment in Sanjay Gandhi Post Graduate Institute of Medical Sciences (SGPGI) Lucknow and where on 14.08.1998 the doctor of SGPGI performed his open heart surgery, the alleged diseases of the insured came to in existence and there is no evidence on record to show that at any point of time prior to that, the insured was receiving any treatment of his diseases. In such circumstances it cannot be said that at the time of proposal of the insurance there was prior knowledge to the complainant of the factum of the diseases of the insured. Such type of diseases which is alleged to have been found to the deceased, since is said to have been common in childhood, that cannot be taken into account a material concealment of diseases by the complainant for his son but at the time of revival of the second policy, thereby depositing the premium on 07.01.1999 with late payment fee, is clear case of concealment of the diseases of the insured because prior to that date the entire scenario of the diseases of the insured had been established very well in the knowledge of the complainant. Therefore, the complainant is not entitled to get any benefit for the second policy the premium of which was not deposited on 01.11.1998 and in our view that policy shall be deemed to have been lapsed due to non deposit of premium even after 30 days of the due date taking recourse of the grace period. Therefore, the claim pertaining to second policy titled as "Bheema Kiran” is not found worth allowed to the complainant.

  So far as the question of First Policy is concerned it is established on record that it remained in force till 27.09.1998 and since the operation of the son of the complainant was conducted in SGGI on 14.08.1998, the complainant is not entitled for the benefit of the policy as per terms and conditions of the policy because the benefit provided in Clause 'B' pertaining to 50% amount for treatment of the diseases in the terms and conditions is not available if such type of disease is occurred within one year of the policy. Here in this case since the operation of the son of the complainant is conducted within 5-6 months of the policy, therefore, the clause of 50% of the amount for the treatment is not applicable in this case. So far as the question of sum assured is payable at the time of death of the insured, here in this case since the death of the son of the complainant occurred on 09.01.1999 and the policy had lapsed till then there being no deposit of further premium for the quarters Sept. and December 1998. Therefore, the sum assured due to the death of the son of the complainant is also not allowable.

  One more question of complaint to be time barred, has been raised on behalf of the opposite parties. The factual position is on record that the complaint before this Commission is filed by the complainant on 26.06.2002. The claim of the complainant repudiated on 23.10.1999, but since earlier this, complaint was filed before the District Consumer Forum on 28.07.2000 which was later on, on the direction of the District Consumer Forum is filed before this Commission on 26.06.2002, we are of this view that the complaint could not be said to have been time barred being the process for his claim was initiated/moved by the complainant within one year of the repudiation of the claim. In this scenario of the fact of the case we are of this view that whatever may be the delay for filing the complaint this Commission by the complainant is such type of delay which stood Condoned. Hence it is held that this complaint is hereby found filed within time. 

  However, we do not find any merit in the case of the complainant for getting relief for the insurance policies, therefore, this complaint deserves to be dismissed.”

7.      Being aggrieved by the order of the State Commission, the Complainant/Appellant filed Appeal no. 335 of 2015 seeking:

1. to set aside the order dated 16.04.2015 Passed by the Hon’ble State Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow in Complaint Case No. 110/2002;
2. to allow the cost of the litigation incurred by the Appellant in the present matter; and/or
3. to pass such other and further order as the Learned Commission may deem fit and proper under the circumstances of the case.

8.      In the Appeal, the Appellant mainly raised the following issues:

1. The State Commission failed to note crucial facts regarding the submission of documents to the OPs within the stipulated time. Despite his assertion of providing the papers to OPs on 11.11.1998, the OPs denied receiving such documents in their written statement. This discrepancy and filing of false affidavit should have been noted by State Commission.
2. The State Commission overlooked the timely payment of premium for the insurance policies taken by him for his son and premiums were regularly paid, with the second premium on 15.06.1998, the third due on 28.09.1998.
3. The premium for second policy was also paid on time, with he depositing second premium in the office of OPs on 28.11.1998, along with extra interest charges.
4. The OPs failed to provide cogent evidence regarding pre-existing disease of the deceased. The State Commission's observed that OPs could not substantiate their case with evidence.
5. State Commission failed to consider the impact of the deceased undergoing open heart surgery on 14.08.1998, especially concerning the entitlement to compensation under the policy.
6. The OPs failed to provide documentary evidence to support claim of pre-existing medical ailments, while onus to prove such claims lies with them.
7. The State Commission overlooked the grace period for premium payment in the second policy. Despite lapse of the policy, he could still have paid within the grace period, rendering the impugned order erroneous.

9.      The learned counsel for the Appellant reiterated the complaint and the grounds of appeal and emphasized the key principles established in RP No. 2020 of 2014 wherein this Commission decided, on acceptance of the premium along with interest and reinstatement charges, the policy stands revived, and the contractual obligation of the insurer to fulfill the terms of policy is reinstated. He underscored the failure of the OP Insurer to provide cogent evidence regarding pre-existing diseases of the DLA. This lack of evidence undermines the basis for repudiation of the claim. The State Commission observations acknowledging OPs failure to prove their case, further strengthens the argument. He sought allowing of the appeal, emphasizing the need to uphold the established principles of law and ensure justice.

10.    The learned counsel for the Appellant has relied upon several pertinent judgments to bolster his case. These judgments serve to reinforce the legal principles and precedents that support the arguments presented in the present appeal. They include:-

a. Saurashtra Chemicals Ltd. v. National Co Ltd (2019) 19 SCC 70.

b. Abhay Ispat (India) Pvt. Ltd. v. National Insurance Company Ltd. CC/712/2018.

c. Aroma De France v United India Insurance Co Ltd CC/1355/ 2016.

d. The Bharat Salt and Chemical Industries Limited v. Oriental Insurance Co. Ltd. and Ors. CC/1894/2018.

e. Sucha Singh v. Head branch Office, HDFC Life and Ors. FA/1071/2018.

f. Orchid Impex and Ors. v. United India Insurance Company Ltd. CC/1100/2016.

g. National Insurance Co. Ltd. v. Ram Surat Paswan FA/549/2020.

11.    The counsel for the Respondents/OPs Insurer has asserted that the DLA had provided false information and concealed his pre-existing medical condition while applying for the policies. The DLA had history of Rheumatic fever and joint pain since childhood and Dyspnoea for the past two years, which was documented in the discharge summary from SGPGI, Lucknow. Based on these the OP LIC is justified in repudiating the claim of the Appellant. The State Commission order is appropriate and sought for dismissal of the appeal. The learned Counsel relied on the following judgments in support of the arguments:

a. Life Insurance Corporation of India and Anr. vs. Ranganath (11.03.2014 -NCDRC) : MANU/CF/0264/2014.

b. Life Insurance Corpn. of India and Ors. vs. Siba Prasad Dash (Dr.) and Ors. (14.08.2008 – NCDRC): MANU/CF/0243/2008.

c. Anil Kumar Dubey vs. Branch Manager /Senior Divisional Manager, LIC of India & Anr. RP no. 2907/2017.

d. United Insurance Co. Ltd. vs. Harchand Rai Chandan Lal.

12.    I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned Counsels for both the parties.

13.    The primary issue in this case revolves around the repudiation of the insurance claim by the Respondent Insurer based on the alleged concealment of pre-existing medical conditions of the DLA. The key question is whether the insured/Complainant provided false information or concealed material facts regarding the health condition of the DLA while applying for the insurance policies.

14.    Undisputedly, the DLA, the son of the Appellant, obtained two life insurance policies from the OP insurance company. The policies were titled 'Ashadeep-II' (Policy No. 2818537676) and 'Bima Kiran' (Policy No. 281853742). The premiums for the policies were paid regularly for a short period. The deceased fell ill and underwent open-heart surgery on 14.08.1998 at SGPGI, Lucknow. Subsequently, the DLA died on 09.01.1999 due to heart attack. The Appellant filed a claim for insurance benefits under both policies after the death of the insured. The insurance company repudiated the claim on the grounds of alleged non-disclosure of pre-existing medical conditions by the deceased. It is evident from the DLA Discharge Summary at Page No. 107 dated 31.08.1998, that the Complainant’s son was in fact suffering from Dyspnoea from the past two years and had history of Rheumatic fever and Joint Pains since childhood, which caused his death due to heart attack. The relevant excerpt from the Discharge Summary states the cause of death, reads as under:

“…Presenting Features:-

          Dyspnoea cl. II/III x 2 yrs.

          H/o rheumatic fever & joint pains in childhood…”

15.    It is also clear from the discharge summary vide report No. 218346 upon the discharge of the DLA from SGPGI, Lucknow on 22.08.1998 that the DLA had the medical history such as Dyspnoea cl. II/III for 2 years and Rheumatic fever and join pains in childhood. Without doubt, the Complainant/Appellant was well aware of medical condition of the DLA. However, while filling the proposal for obtaining the insurance filed on 25.04.1998 reveals that, the Complainant/DLA had declared the DLA to be completely fit and not suffering from any ailments. Therefore, while it is an established position that the DLA had certain significant medical conditions for which he was taking treatment and was hospitalized as well, however, he did not disclose the same to the insurer at the time of obtaining the policies. It is also evident that the second policy for which only one premium was paid and lapse due to non-payment on second premium was restored on 07.01.1999, two days prior to the death of DLA on 09.01.1999.

16.    In view of the foregoing, I am of the considered view that the DLA/ Complainant have failed to disclose the DLA’s medical conditions while obtaining the said Insurance Policies. In this regard Hon’ble Supreme Court in Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848 decided on 09.10.2020 lays down that:

 “A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk.”

17.    Similar view was taken by the Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 decided on 24.11.2019 wherein it was held that suppression of the facts made in proposal form will render Insurance Policy voidable by the Insurer.

18.  In view of the aforesaid discussion above, as well as the principles laid down by the Hon’ble Supreme Court supra, I do not find any illegality or infirmity in Order passed by the learned State Commission dated 16.04.2015. Therefore, the Appeal filed by the Complainant is dismissed. The Order passed by the State Commission is upheld.

19.    There shall be no order as to costs. All pending application, if any, also stand disposed of accordingly.

20.    The Registry is directed to release the Statutory deposit amount, if any in favour of the Appellant.