1.      This revision petition has been filed by Aviva Life Insurance Company India Ltd. (hereinafter referred to as the Petitioner-Insurance Company) being aggrieved by the order dated 09.08.2011 of the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (hereinafter referred to as the State Commission), which upheld the order of the District Consumer Disputes Redressal Forum, Ajmer (hereinafter referred to as the District Forum) in favour of Manohar Bhogawat @ Manvar Bhogawat, Respondent herein and Complainant before the District Forum.

2.      The facts of the case are that the Respondent’s mother (hereinafter referred to as the Insuree) had taken a life insurance policy from Petitioner-Insurance Company for Rs.3 Lakhs with other consequential reliefs and during the validity period of the policy and within 5 months of her taking the same, she expired on 23.10.2008.  Respondent as her nominee filed a claim, which was repudiated by the Petitioner-Insurance Company on the ground that the Insuree had suppressed material facts by not disclosing that she was suffering from Cirrhosis of the Liver (from which she expired) while filling the proposal form.  Repudiation of the claim was challenged by the Respondent, who also served a legal notice on the Petitioner-Insurance Company to settle the claim as per the terms and conditions of the insurance policy.  However, since there was no satisfactory response from the Petitioner-Insurance Company, Respondent filed a complaint before the District Forum on grounds of deficiency in service and unfair trade practice and requested that the Petitioner-Insurance Company be directed to settle the claim in terms of the policy i.e. Rs.3 Lakhs with interest @ 24% per annum, compensation of Rs.50,000/- and costs of Rs.5500/-. 

3.      Petitioner-Insurance Company denied that there was any deficiency in service on their part.  It was contended that the claim was rightly repudiated since the policy was obtained by misrepresentation and suppression of material facts by the Insuree regarding her health, thus, breaching the principle of Uberrima Fides, which is the cardinal principle of insurance policies between the parties.  There was clear evidence from Jawahar Lal Hospital, Ajmer that the Insuree was being treated for chronic alcoholism/Cirrhosis for the past two years whereas in the proposal form she had stated that she did not consume alcohol.  The District Forum, after hearing the parties and considering the evidence filed before it, allowed the complaint and directed the Petitioner-Insurance Company to pay the Respondent a sum of Rs.3 Lakhs with interest @ 9% per annum along with all benefits as also Rs.2500/- as costs within two months.  Being aggrieved by the said order, the Petitioner-Insurance Company filed an appeal before the State Commission, which dismissed the same by observing as follows :

“…  The insured belongs to scheduled tribe namely Sansi community and was an illiterate lady.  Only thumb impression of the insured was taken on the proposal form.  There is no affidavit of the agent that each and every condition of the policy had duly been explained to the insured or to her attendant.  Even the alleged hospital record have not been proved by way of an affidavit of the doctor concerned or even the hospital Superintendent.

          Be that as it may in similar matters this Commission has observed that now a days insurance companies are growing like mushrooms resulting in unhealthy business competition.  The agent of the company is required to explain all the details and conditions of the insurance policy sought to the customer.  A common man is not supposed to know all the niceties and technicalities of law.  Once accepting the premium and having entered into an agreement without verifying the facts, the insurance company cannot wriggle out of the liability merely be saying that the contract was made by misrepresentation and concealment.  The insurance policies should not be issued and repudiated in such a casual mechanical manner.  The policy entails the liability on both sides.  It is rather exploitation of the customer and more or less fraud on the public.  Such practice should be strongly deprecated.”

Hence, the present revision petition.

4.      Learned counsel for both parties were present and made oral submissions.

5.      Learned counsel for the Respondent stated at the outset that the State Commission had rightly concluded that the Petitioner-Insurance Company was not justified in repudiating the claim by concluding that since the Insuree, who was an illiterate lady and whose thumb impression was taken on the proposal form, was not explained all the terms and conditions of the policy and a “common man” is not supposed to know the technicalities of law.  She cannot be, therefore, held responsible for suppression of material facts.

6.      Learned counsel for the Petitioner-Insurance Company on the other hand brought to our attention a copy of the proposal form, which was filed in evidence, which clearly indicates that all due care to explain the terms and conditions of the policy was taken by the Petitioner-Insurance Company.  This is confirmed by the fact that in Section-12 of the proposal form itself it was noted that since the Insuree was not literate and had given only a thumb impression, the terms and conditions of the policy were explained to her by a person known to her and specifically unconnected with the Petitioner-Insurance Company.

7.      We have heard learned counsel for both parties and have carefully gone through evidence on record.  The fact that Respondent’s mother had taken an insurance policy and that she had died within 5 months of Cirrhosis caused by chronic alcoholism are not in dispute.  It is further a fact that the claim was repudiated by the Petitioner-Insurance Company on the ground that the Insuree had suppressed material facts by not disclosing that she was suffering from Cirrhosis of the Liver being a chronic alcoholic and that she was under the treatment for the same prior to her taking the insurance policy.  In the complaint filed under Section 12 of the Consumer Protection Act, 1986 by the Respondent challenging the repudiation of the claim, it has nowhere been denied that the Respondent’s mother was suffering from a pre-existing disease.  The main reason for filing the complaint before the District Forum was that the terms and conditions of the policy were never explained to the Insuree, who was an illiterate woman, nor to the Respondent and in the absence of the same there was no question of suppression of material facts or breach of good faith. 

8.      We agree with the submissions made by the learned counsel for petitioner-Insurance Company.  We are unable to agree with the findings recorded by the fora below in view of the fact that in column-12 of the proposal form (page 37 of the paper-book), which is relevant in cases where a thumb impression of an Insuree is taken in the proposal form, the following declaration has been made:-

“I hereby declare that I have fully explained the contents of the proposal form to the life to be insured/proposer and that he/she has fully understood the same and I have truthfully recorded the answer given by the life to be insured/proposer.”

It bears the signature of the person who had explained the terms and conditions of the policy and who is unconnected with the Petitioner-Insurance Company.  Keeping in view this fact and since admittedly the Insuree was suffering from a pre-existing disease, which she suppressed in the proposal form, the principle of Uberrima Fides was clearly breached by the Insuree, thus, justifying the repudiation of the claim by the Petitioner-Insurance Company. 

9.      We are, therefore, unable to sustain the order of the State Commission, which is set aside.  The revision petition is allowed.  No costs.