1.      The present Revision Petition has been filed by the Petitioner under Section 21(b) of the Consumer Protection Act, 1986 (the “Act”) against impugned order dated 23.12.2015, passed by the learned Punjab State Consumer Disputes Redressal Commission, Chandigarh, (‘the State Commission’) in First Appeal No. 43/2015 wherein the State Commission allowed the Appeal filed by the Respondents/OPs against the order dated 20.10.2014 passed by the learned District Consumer Disputes Redressal Forum, Ferozpur, (‘the District Forum’) whereby the District Forum had allowed the complaint filed by the Petitioner/Complainant and directed the Respondents/OPs to pay Rs.87,520/- along with vested bonus, if any, along with 9% per annum from the date of repudiation of the claim i.e. 07.03.2014 till realization besides Rs.5,000/- as litigation expenses to the Petitioner/Complainant, within 30 days from the receipt of copy the order.

2.      As per office report, there is a delay of 38 days in filing of the present Revision Petition.  For the reasons stated in I.A. No.4508 of 2016, the delay is condoned.

3.      For 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 he filed the death claim of the policy of his father (deceased life insured- DLI), after his death on 18.08.2013 for maturity sum assured Rs.87,520/- and death benefit sum assured Rs.2 Lakh.  However, the OPs repudiated the claim vide letter dated 07.03.2014 on the grounds non-disclosure of treatments taken. Aggrieved, he filed a complaint seeking directions to OPs to pay the claim amount with interest @ 24% per annum from the date of claim till the actual realization of the amount along with Rs.2 Lakh compensation on account of mental harassment, pain and agony together with Rs.11,000/- as litigation expenses.

5.      In reply, the Respondents/OPs admitted the issuance of policy and receipt of the claim and contended that, while taking the policy, the deceased life insured (DLI) had hidden material information about his disease and treatment and deliberately did not disclose the facts of his ailment. This amounted to suppression of material facts and giving misstatements with ulterior intention to obtain the insurance policy. The OP came to know during investigation that the deceased life insured had consulted doctors and remained on medical leave from 06.12.2008 to 15.12.2008, from 18.07.2010 to 03.08.2010, from 16.08.2010 to 14.09.2010, from 15.05.2011 to 30.05.2011 and from 18.08.2011 to 08.09.2011 totaling 124 days and had taken treatment at various hospitals, prior to date of filing up the proposal form dated 08.09.2011. Hence, the OP rightly repudiated the claim for non-disclosure of the material facts in the proposal form of the policy. The decision to repudiate the claim was taken in good faith and based on an inquiry. This being a considered repudiation, no deficiency is involved.

6.      The learned District Forum vide Order dated 20.10.2014 allowed the complaint and granted the following relief:-

“6. In view of what has been discussed above, this complaint is accepted and the opposite parties are directed to pay to the complainant the Maturity Sum Assured of Rs. 87.520/- under the policy along with vested bonus, if any, along with interest at the rate of 9% per annum from the date of repudiation of the claim i.e. 7.3.2014 till realization. Further the opposite parties are directed to pay of Rs.5000/- as litigation expenses to the complainant. This order is directed to be complied with within a period of thirty days from the date of receipt of a copy of this order. File be consigned to the record room.”

7.      Being aggrieved by the Order of the learned District Forum, the Respondents/OPs filed First Appeal No.43 of 2015 before the learned State Commission and the State Commission vide order dated 23.12.2015 allowed the Appeal and dismissed the complaint filed by the Petitioner /Complainant with the following observations:

“5.      We have heard the learned counsel for the appellants/OPS. The respondent was proceeded against ex-parte vide order dated 18.5.2015. We have carefully gone through the record of the case.

6. It was submitted by the learned counsel for the appellants/OPs that the District Forum erred in not appreciating the defence raised by them that the contract made between the Insurance Company and life insured is based on the principle of uberrima fides, so it was required by the life insured to disclose every material fact, at the time of filling up the proposal form, but the DLA had not disclosed that he remained on medical leave for 125 days and he consulted and took treatment from various doctors and hospitals for his Alcohol narcotics, Fistula, LBA, Perional Sepsis, Typhoid and abscess. These facts were not disclosed in the proposal form at the time of obtaining the insurance policy. The District Forum had wrongly held that the OPs had not produced any evidence that there was any nexus between the pre-existing disease and cause of death of DLA. The District Forum without appreciating the evidence produced on the record, wrongly allowed the complaint. The findings of District Forum are based on conjectures and surmises. The District Forum did not consider the fact that the DLA was employed as Assistant Lineman in PSEB and he had not taken this policy for the first time, but he was having two other policies issued in year 2001 & 2005 respectively, which was mentioned in the proposal form. It was prayed that the appeal be accepted and the order of the District Forum be set aside.

7.        It is an admitted fact that the father of the complainant purchased LIC Jeevan Saral (with profits) policy bearing No.473245579 for the period 9.9.2011 to 9.9.2026 for a sum insured of Rs.87,520/- after paying the half yearly premium of Rs.4,852/- vide Ex. C-2. He was appointed as nominee under the said policy. DLA died on 18.8.2013. DLA was having two other policies which were issued in the year 2001 and 2005. This fact was disclosed by DLA in the proposal form and complainant admitted the same in his claim form. Hence, we can infer that he was aware of the terms and conditions of insurance policy. We have perused the proposal form Ex. OP-1&2/9. The relevant portion of the proposal form is reproduced as under.-

Personal History

"Declaration by the proposed:

        I. HARI DUTT SHARMA, the person whose life herein before proposed to be assured, do hereby declare that the foregoing statements and answers have been given by me after fully understanding the questions and the same are true and complete in every particular and that I have not withheld any information and I do hereby agree and declare that these statements and this declaration shall be the basis of the contract of assurance between me and the Life Insurance Corporation of India and that if any untrue averment be contained therein the said contract shall be absolutely null and void and all premiums which shall have been paid in respect thereof shall stand forfeited to the Corporation."

8.        The claim of the complainant was repudiated, vide letter dated Rec 7.3.2014 Ex.C-3 by the OPs. The relevant portion of the letter Ex.C-3 provides as under:

    "It is therefore evident that he made deliberate Mis-statement and withheld the correct & material information from us regarding his ill state of health and consequent treatment at the time of effecting the assurance and hence in terms of the policy contract (condition 5)-

Forfeiture in certain events of Conditions and Privileges of Policy Bond) and the declarations contained in the form of proposal for assurance dated 23.2.2011, we hereby repudiate the claim and accordingly, we are not liable for any payment under the policy."

9.  We have perused medical certificates of the life assured as under:

i) Ex OP1 &22 medical certificate issued by Dr.Madan Mohan Aggarwal M.B.B.S. which state that Hari Dutt was suffering from fever (Typhoid) and severe backache and was advised rest from 05-12-2008 to 12-12-2008.

ii)  Ex OP1 &2/3 medical certificate issued by Dr. Kamal Kant Badhwar, Bone Joint & Polio Specialist, of Tarlok Hospital to Haridutt, who was advised complete bed rest for t/t CD of Fistula from 18-07-2010 to 23-07- 2010.

iii) Ex OP1 &2/4 medical certificate issued by Dr. Kamal Kant Badhwar, Bone Joint & Polio Specialist, of Tarlok Hospital to Haridutt, son of Parkash Chand, who took treatment from the hospital for the outdoor for alcoholic Necnti with fistula and from 16/8/2010 to 14/9/2010. He attended OPD …….. He was advised rest from 16/8/10 to 14/9/10.

iv) Ex OP1& 2/5 medical certificate issued by Dr. Kamal Kant Badhwar Bone Joint & Polio Specialist, of Tarlok Hospital to Haridutt of Parkash Chand, who remained under his treatment with LBA from 15/5/2011 to 29/5/2011. He took outdoor treatment for the ailment.

v) Ex OP1 &2/6 THE PUNJAB HEALTH SYSTEM CORPORATION CIVIL HOSPITAL OPD SLIP Dated 18/08/2011. Diagnosis: Fistula ano.

Vi) Ex OP1 &2/7 Outdoor Ticket of Guru Gobind Singh Medical College and Hospital, Faridikot Dated 19.08.2011 He was advised bed rest for five days.

vii) Ex OP1 &2/8 medical certificate of Guru Nanak Mission Hospital for OPD treatment from 29/8/2011 to 01/09/2011, and advised bed rest from 02/9/2011 to 08/10/2011 for abscess.

            The medical certificates Ex. OP-1 &2/2 to Ex. OP-1 &2/5 and OP-1 &2/8 and prescription slips OP1 &2/6 and OP1 & 2/7 respectively show that DLA took treatment for Alcohol narcotics, Fistula, LBA, Perional Sepsis, typhoid and abscess. The DLA availed medical leave from 06.12.2008 to 15 12.2008, 18.7.2010 to 3.8.2010, 16.8.2010 to 14.9.2010, 15.5.2011 to 30.5.2011 and from 18.8.2011 to 8.9.2011, as ன் depicted in the certificate Ex.OP1& 2/1 issued by, the employer of the insured.. The proposal form so filled in by the insured at the time of obtaining the policy was proved as Ex. OP-1&2/9, which contained the above said declaration duly signed by DLA. As per that declaration, the statements and the answers were given understanding by DLA after fully understanding the question and the same were true and complete in every particular.  He had also agreed and declared that those statements and declaration would be the basis of the contract of insurance between him and the LIC and that if any untrue averment is contained therein, the contract shall be absolutely null and void.

10.  A perusal of the questionnaires, as mentioned in the proposal form OP 1&2/9, makes it very much clear that DLA was asked if he remained absent from the place of work during the last five years and whether he remained admitted in any hospital for treatment or for general check up. He gave reply in No. Thus, the DLA suppressed the maternal information with regard to his health asked from him. In case, he would have disclosed these facts, OPs might have refused to accept the proposal or might have undergone for more tests of DLA before issuing the policy. On account of making false statements in the proposal form by the insured, the contract of insurance is rendered void.

11.      As per the claimant's statement Ex.C-9, the cause of the death of the DLA was mentioned as Heart Attack.  The District Forum has observed that no evidence was produced by OPs that the alleged disease pointed out by them had any nexus with the cause of death of the insured. No doubt that there is no direct evidence that heart attack h was suffered by DLA due to the diseases of which he was suffering. The DLA was under an obligation to give correct answers pertaining to his health at the time of issuance of policy and it is immaterial whether cause of death had any nexus or not with the disease suffered and suppressed by him. The contract of insurance is based on utmost good faith and if the insured deliberately suppressed any material facts of his pre-existing disease fraudulent renders the contract of insurance as invalid. The findings so recorded by the District Forum are contrary to the evidence brought on record by the OPs and wrongly allowed the complaint. So, the order of the District Forum cannot be sustained in this appeal and the claim repudiated by the OPs is justified.

12.      Sequel to the above discussion, the appeal filed by the appellants is accepted and the order passed by the District Forum is set aside. Consequently, the complaint filed by the complainant is dismissed.”

8.      Being dissatisfied by the Impugned Order dated 23.12.2015 passed by the State Commission, the Petitioner / Complainant has filed the instant Revision Petition bearing no.1469 of 2016.

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

10.    The case of the Petitioner revolves around the rejection of a death claim under a life insurance policy. The petitioner, who is the nominee of the deceased policyholder, contended that the claim was wrongfully repudiated by the insurance company and asserted that the deceased Insured never concealed any material facts. Therefore, the Respondents/Insurance Company’s repudiation is unjustified. He cited various legal precedents to support his case, emphasizing that the State Commission has failed to consider the basic premise of the life insurance policy and should not be arbitrary. He sought due settlement of the claim and uphold the order of the District Forum.

11.    On the other hand, the contentions and arguments of the Respondents/OPs revolve around the assertion that his claim was rightly repudiated due to non-disclosure of material facts at the time of taking the insurance policy. The Respondents/OPs relied on certain legal precedents to assert that the proposer has a duty to disclose pre-existing ailments health condition to the insurer.

12.    It is a matter of record that the deceased had obtained a life insurance policy and the Complainant filed the death claim of the policy of his father (deceased life insured) DLI, after his death on 18.08.2013 of maturity sum assured Rs.87,520/- and death benefit sum assured Rs.2 Lakh.  However, the OPs repudiated the claim vide letter dated 17.03.2014 for failing to disclose the medical treatments as required. Hence, he filed complaint seeking directions to the OPs to pay maturity sum assured Rs.87,520/- and death benefit sum assured Rs.2 Lakh along with compensation and interest on account of unreasonable delay and mental harassment.

13.    It is an admitted position that the insured was suffering certain ailments and had not disclosed these material facts at the time of taking the insurance policy. The Complainant did not disclose the medical conditions while filling the proposal and obtained the policy. The Respondents/OPs asserted that the contract for life insurance is based on utmost good faith and the insured was bound to clearly bring out all prescribed details, including his medical condition. However, he failed to do so. Hon’ble Supreme Court in Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848 decided on 09.10.2020 has held 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.”

14.    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. A Division Bench of the Mysore High Court in VK Srinivasa Setty Vs M/s Premier Life and General Insurance Co Ltd which is cited with approval by the Hon’ble Supreme Court in this case:

31. Finally, the argument of the respondent that the signatures of the assured on the form were taken without explaining the details cannot be accepted. A similar argument was correctly rejected in a decision of a Division Bench of the Mysore High Court in VK Srinivasa Setty v Messers Premier Life and General Insurance Co Ltd21 where it was held:

― Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understanding it. That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form.

- If an agent nevertheless does that, he becomes merely the amanuensis of the insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer.

15.    In the present case, it is the contention of the Petitioner that the deceased insured was covered under the life insurance policy from 09.09.2011 for maturity sum assured Rs.87,520/- and death benefit sum assured Rs.2 Lakh. The date of maturity was 09.09.2026. However, the insured died on 18.08.2013. It is also an admitted position that the insured was diagnosed various ailments and had undergone treatment for same before taking the insurance policy in question. While the Complainant asserted that the deceased insured did not conceal about the previous illness, however, the proposal form filled by the deceased insured reveals that he had not mentioned any previous illness.

16.    Based on the aforesaid discussion as well as the principles laid down by the Hon’ble Supreme Court as mentioned above, I am of the considered view that the Order of the State Commission dated 23.12.2015 does not suffer from any infirmity. The Revision Petition No.1469 of 2016 is, therefore, dismissed.

17.    There is no order as to costs. All pending Applications, if any, stand disposed of accordingly.