1.      This revision petition under section 21 of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order dated 02.03.2016 in Appeal No.  68 of 2010 of the State Consumer Disputes Redressal Commission, Uttar Pradesh, Lucknow (in short, the ‘State Commission’) allowing the appeal and dismissing order dated 08.12.2009 of the District Consumer Disputes Redressal Forum-I, Bareilly (in short, the ‘District Forum’) in Consumer Complaint no. 222 of 2008.

2.      The facts of the case, according to the petitioner, in brief, are that her husband late Sri Om Prakash Jaiswal was holder of a life insurance policy effective from 28.01.2003 to 28.01.2025 for Rs 10,00,000/- issued by the respondent. The insured died on 04.02.2005 in Devki Hospital, Chennai due to cardiac respiratory arrest secondary to intra-cerebral hemorrhage with raised intracranial pressure and chronic renal failure with end stage renal disease. The claim by the petitioner as the legal heir was repudiated on 29.09.2006 inter alia on ground of suppression of material facts relating to pre-existing diseases of the Deceased Life Assured (DLA) such as diabetes for 18 years and hypertension for 5 years prior to the date of the policy. Her complaint before the district Forum under section 12 was allowed. However, the State Commission allowed the respondent’s appeal which order is impugned before this Commission.

3.      The petitioner’s case is that the order of the State Commission is a miscarriage of justice since the death of the DLA occurred after 2 years of the date of the policy and therefore the respondent’s reliance on section 45 of the Insurance Act, 1938 does not apply. It is contended that the respondent did not file the proposal form and the State Commission erred in providing it the protection under section 45. It is stated that while there was no fraudulent suppression of facts, this issue cannot also be called into question after 2 years of the date of sanction of policy.

4.      Reliance in this regard is placed on the judgments of the Hon’ble Supreme Court of India in Mitholal Nayak Vs. LIC of India, AIR 1962 SC 814 and LIC Vs. Asha Goel, AIR 2001 SC 549 which laid down that under section 45 of the Insurance Act, a policy may be questioned after 2 years only on the ground of willful fraudulent suppression of material facts and not mere inaccuracy or falsity of some items, the burden of proof of which lies upon the insurer. The petitioner also relies upon this Commission’s orders in (i) LIC of India Vs Smt. Pramila Mehrotra, I (2004) CPJ (NC) and (ii) LIC of India Vs. Kulwant Kumar, II (2009) CPJ 317 (NC) in cases of diabetes as a pre-existing disease.

5.      The petitioner contends that the State Commission erred in relying upon the oral version of the respondent that certain documents, including the proposal form, had been lost in the office of the LIC since this assertion cannot be accepted in the absence of documentary evidence especially since other documents were available. No name or certificate of the doctor for the treatment of diabetes or prescription of medicines for the past 18 years had been produced or the hospital where the DLA was hospitalized. It is also contended that Diabetes type II is not life threatening and that the respondent insurance company has not produced evidence to establish the type of diabetes the DLA was suffering from. The DLA was also examined by qualified doctors prior to approval of policy and hence it is not open for the respondent to contend that he was not of sound health. Petitioner contends that medical documents produced by the respondent are indicative of the DLA’s health after the policy was taken as these reports are dated 2004 or later and hence cannot be connected to pre-existing diseases. It is submitted that the discharge summary is required to be read with medical certificates of the attending doctor which records the DLA’s statement that he had not been treated for any illness in any hospital prior to admission to Devki Hospital, Chennai on 27.12.2004. The reference to pre-existing diabetes for 18 years is alleged to have been told by a relative to the attending doctor whose identity is not known and therefore the allegation of suppression of material facts pertaining to pre-existing illnesses is baseless, especially as it is not supported by any affidavit or evidence of the doctor as held by this Commission in Sushil Kumar Jain Vs. Limited India Insurance Co., I (2002) CPJ 204.

6.      The petitioner states that the case of Satwant Kaur Sandhu Vs. New India Insurance Co. Ltd., IV (2009) CPJ 8 (SC) is distinguishable legally and factually since it related to a Mediclaim governed by a written contract between the parties whereas the instant case is governed by section 45 of the Insurance Act, 1938 pertaining to the questioning of the policy after 2 years of coming into force. The burden of proof to prove pre-existing disease has not been discharged by the respondent which has failed to even provide the proposal form of the DLA. Therefore the order of the State Commission is stated to be erroneous that deserves to be set aside.

7.      I have heard the learned counsel for both the parties and given thoughtful consideration to the material on record.

8.      On behalf of the petitioner it was argued that as the DLA expired after 2 years of the policy’s commencement of renal failure, the repudiation of the claim by the respondent on grounds that DLA was suffering from chronic renal failure for 4 years and diabetes mellitus for 18 years with hypertension which amounted to wilful suppression of material facts by him was violative of section 45 of the Insurance Act, 1938 was erroneously upheld by the impugned order of the State Commission. It is argued that the specific restrictions of section 45 were illegally ignored in the impugned order since no policy is to be called in question after two years f proposal and the burden of proof is on the insurer which has not been discharged as the proposal document has not been produced and stated to have been lost. No documents in support of the contention that the DLA was suffering from diabetes mellitus for 18 years has been produced by the respondent and despite investigation, neither the name of the treating doctor nor treatment related papers have been filed. Reliance is placed on the discharge summary of Devki Hospital, Chennai which mentions pre-existing illness but the same is not supported by any affidavit of the treating doctor. It is also argued that the cause of death is cardiac respiratory arrest which has no nexus to the alleged pre-existing disease of diabetes and therefore the repudiation by the respondent is illegal. Reliance by the State Commission on Satwant Kaur (supra) was erroneous as the case is distinguishable since this is a matter under section 45 of the Insurance Act, 1938.

9.      Per contra, it was argued on behalf of the respondent that the impugned order rightly repudiated the claim in accordance with the substance of section 45 of the Insurance Act, 1938 in view of the fraudulent and deliberate suppression of material information regarding the state of health of the DLA at the time of taking the insurance policy from the respondent. Information regarding diabetes mellitus and hypertension for the past 18 years and chronic renal disease for the past 4 years had been withheld at the time of the sanction of policy. Respondent has relied upon several documents including the Medical Attendant’s Certificate (Claim Form ‘B’), certificate of Hospital Treatment dated 24.09.2008, Inquest Report dated 31.08.2006, Discharge Certificate of Devaki Hospital and CT Scan Report dated 18.01.2004. Statements in the proposal form dated 30.12.2002 are stated to be false and incorrect as discovered during investigations.

10.    The policy in question commenced on 28.01.2003 and the insured expired on 04.02.2005 which was just over 2 years of the life cover. Investigations by the respondent revealed that the DLA had long standing diabetes and hypertension for 18 years and Chronic Renal Disease for 4 years and was on maintenance haemodialysis since August 2004. He had been detected with end stage renal disease in 2000. These prior medical ailments had not been disclosed in the proposal form which were material facts under the Insurance Act and which would have enabled the respondent to decide upon whether or not to sanction the policy. As the withholding of information was wilful the policy can be called into question even after 2 years of it coming into effect. It is argued that insurance is a contract governed by the principle of uberrima fides or utmost good faith which stood vitiated in the present case due to non-disclosure. Respondent relies upon the judgment of the Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 which laid down that in a contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept or not accept the risk is a material fact. If the proposer has knowledge of such fact, she or he is obliged to disclose it particularly while answering questions in the proposal form. An inaccurate answer will entitle the insurer to repudiate because there is a presumption that information sought in the proposal form is material for the purpose of entering into a contract of insurance.

11.    Respondent argued that repudiation has been rightly upheld by the State Commission which held that

“a mere denial of knowledge relating to previous ailments can not be treated as correct in view of the seriousness of the ailments and documents available on record. The Forum below failed to deal with the matter appropriately.  It ignored the CT Scan report, Medical Attendant’s Certificate, Death Certificate, and the Hospital Records and delivered the judgment on the basis of surmises and conjectures and therefore cannot be allowed to sustain. Consequently, the appeal deserves to be allowed. The repudiation was made on the basis of cogent documentary evidence. There is no irregularity, illegality or impropriety in it.”

It is therefore the respondent’s case that the impugned order be upheld as being legal and valid.

12.   From the above it is manifest that the respondent approved a life insurance policy on 28.01.2003 in respect of the deceased husband of the petitioner based on a declaration of good health in the proposal form. On the demise of the life assured, the claim was repudiated on the basis of an investigation by the respondent on the basis of which it was concluded that the DLA was a long standing patient of diabetes mellitus, hypertension and a recent patient of renal disease. The basis of this conclusion is the investigation report which has relied upon medical documents from the time of the admission of the DLA to the hospital where he died on 04.02.2005 due to cardiac respiratory arrest secondary to intra-cerebral hemorrhage with raised intracranial pressure and chronic renal failure with end stage renal disease. The respondent contends that the cause of death is due to pre-existing illnesses which were willfully not disclosed at the time of obtaining the insurance and thereby amounts to fraudulent concealment of material facts which can be called into question even after two years of the policy under section 45 of the Insurance Act and which has been correctly upheld by the impugned order of the State Commission. The petitioner has assailed the order of the State Commission on the ground that it is erroneous in considering the diseases to be pre-existing since the documents relied upon are post the commencement of the policy and even the proposal form has not been produced. The State Commission is alleged to have erred in relying upon an oral submission rather than documentary evidence of the proposal form and statements that are not supported by affidavits of doctors. It is contended that the respondent has not discharged the burden of proof cast on it under section 45 of the Insurance Act and therefore the impugned order deserves to be set aside.

13.    At this stage it would be relevant to consider section 45 of the Insurance Act, 1938 as it read prior to its amendment in 2015.  This section reads as below:

45. Policy not to be called in question on ground of misstatement after two years.--  No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose:

Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.

From a reading of section 45 above, it is evident that the limitation of two years for the policy to be called into question is qualified by the provision that “unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose”. The onus is therefore clearly on the insurer/respondent herein. From the record it is also evident that the respondent has relied upon medical documents such as Medical Attendant’s Certificate (Claim Form ‘B’), certificate of Hospital Treatment dated 24.09.2008, Inquest Report dated 31.08.2006, Discharge Certificate of Devaki Hospital and CT Scan Report dated 18.01.2004. These are all documents that are post the issuance of the policy and, in fact, pertain to the time of the DLA’s hospitalization preceding his death. No documents that relate to treatment prior to 28.01.2003 when the policy was obtained have been brought on record by the respondent. Even the proposal form on the basis of which it is stated that no pre-existing illnesses were disclosed has not been brought on record on the ground that it is lost. No evidence of treatment undertaken in any hospital or from any doctor such as medical prescriptions, reports of blood tests, etc or affidavits have also been brought as evidence. The petitioner has rightly highlighted that it is not proved whether the DLA suffered from Diabetes Mellitus Type I or II.  Therefore, the burden on the insurer under section 65 cannot be said to have been discharged entitling him to conclude that there was non-disclosure of material information rendering the policy void.

14.    The reliance on Rekhaben Nareshbhai Rathod (supra) is not of help to the respondent since the proposal form itself is not produced by it to prove the existence of diseases that the DLA was suffering from prior to 28.01.2003. No documents have also been filed in support of the argument that the DLA had been diagnosed with end stage renal disease in 2000 and was on maintenance haemodialysis.

15.    The conclusion of the State Commission that the District Forum “ignored the CT Scan report, Medical Attendant’s Certificate, Death Certificate, and the Hospital Records and delivered the judgment on the basis of surmises and conjectures and therefore cannot be allowed to sustain” and its conclusion that “the repudiation was made on the basis of cogent documentary evidence. There is no irregularity, illegality or impropriety in it” cannot be sustained in the light of absence of documentary evidence and failure to meet the requirements of section 65 in the discharge of the burden to prove wilful and fraudulent withholding of details of pre-existing illnesses.

16.    In view of the reasons stated above, the revision petition is liable to succeed. The impugned order of the State Commission is found to be erroneous and accordingly, the same is dismissed as without merits. Order of the State Commission is set aside.