1.         The present Revision Petition (RP) has been filed by the Petitioner against Respondents as detailed above, under section 21(b) of Consumer Protection Act 1986, against the order dated 10.10.2017 of the State Consumer Disputes Redressal Commission, Rajasthan (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No. 302/2017 in which order dated 04.01.2017 of District Consumer Disputes Redressal Forum, Jaipur (hereinafter referred to as District Forum) in Consumer Complaint (CC) No. 1566/2014 was challenged, inter alia praying for setting aside the order passed by the State Commission in FA/302/2017.

2.         The Revision Petitioner (hereinafter also referred to as Complainant) was Respondent before the State Commission and Complainant before the District Forum and the Respondents (hereinafter also referred to as Opposite Parties) were Appellants before the State Commission in FA/302/2016 and Opposite Parties before the District Forum in Complaint No. 1566/2014.

3.         Notice was issued to the Respondent(s) on 03.04.2018.  Parties filed Written Arguments on 03.10.2023 (Petitioner) and 27.09.2023 (Respondents) respectively. 

4.         Brief facts of the case, as presented by the Complainant and as emerged from the RP, Order of the State Commission, Order of the District Forum and other case records are that: -

The Petitioner/complainant took mediclaim policy from Oriental Insurance Company on 18.07.2009, for a period from 18.07.2009 to 17.07.2010. Thereafter, the Petitioner, under the portability scheme, got the Mediclaim Policy transferred to National Insurance Company and the same was initially for the period w.e.f. 18.07.2010 to 17.07.2011 and thereafter renewed for the period w.e.f. 18.07.2011 to 17.07.2012.  The Petitioner, his wife and two daughters were covered under the said Mediclaim Policy.  The Petitioner paid Rs.28,050/- towards premium of the said Policy. The wife of the Petitioner fell ill and was taken to hospital at Jaipur for treatment.  After conducting tests, the doctor diagnosed that she is suffering from Advance Parkinson and advised the Petitioner to get his wife treated at Jaslok Hospital, Mumbai. Accordingly Petitioner’s was admitted in Jaslok Hospital, Mumbai on 07.04.2014. She underwent surgery at Jaslok Hospital, Mumbai on 09.04.2014 and was discharged on 17.04.2014.  The Petitioner spent Rs.16,06,946/-  on treatment of his wife. The Petitioner filed claim with the Insurance Company/Respondents herein on 30.04.2014.  The Respondents repudiated the claim vide letter dated 18.06.2014 on the ground that the wife of Petitioner was suffering from Parkinson disease, which was not disclosed at the time of taking the Mediclaim Insurance Policy.  The Mediclaim Policy was renewed for further period w.e.f. 18.07.2014 to 17.07.2015. The Petitioner paid Rs.33,095/- towards the premium.  Petitioner requested the Insurance Company to provide copy of the medical examination of his family done by their authorized Doctor at the time of taking the Mediclaim policy, Respondent-1 vide its email dated 17.11.2014 alleged that on the basis of the request of the Petitioner, the Mediclaim Policy has been cancelled and the premium amount shall be refunded within 10 working days. The Petitioner vide email dated 18.11.2014 denied that he ever had requested for cancellation of the Mediclaim Insurance Police. Being aggrieved by illegal and arbitrary repudiation of claim, the Petitioner filed complaint before the District Forum.

5.         Vide Order dated 04.01.2017 the District Forum allowed the complaint CC No. 1566 of 2014. Aggrieved by the said Order dated 04.01.2017 of District Forum, Respondents/ Insurance Company appealed before the State Commission and the State Commission vide its order dated 10.10.2017 allowed the Appeal and set aside the order passed by the District Forum.

6.         Petitioner has challenged the said Order dated 10.10.2017 of the State Commission mainly on following grounds:

1. The impugned order passed by the State Commission is bad in law and on facts and suffers from material irregularities.  The inference drawn by the State Commission that the state of health of wife of the Petitioner was concealed at the time of submitting the proposal form, is wrong and misplaced being not based on the material available on record. At that relevant point of time neither the Petitioner nor his wife was aware that the wife of the Petitioner was suffering from Parkinson disease as such question of suppressing the same from the Respondents does not arise.  Therefore, there was no suppression of material fact from the side of the Petitioner.

2. The State Commission did not appreciate that if the Petitioner or his wife were aware in the year 2006 that the wife of Petitioner is suffering from Parkinson disease, then they would not have waited for her treatment till the year 2014 only for taking benefit of Mediclaim Policy.

3. The State Commission did not appreciate that the Respondents failed to discharge the onus that the Mediclaim Policy was obtained by misrepresentation or concealment as they were not able to bring any evidence or cogent and reliable proof.

4. The discharge summary dated 17.04.2014 of Jaslok Hospital, Mumbai, whereupon reliance was placed by the Respondents and reference thereto was also made by the State Commission in its order dated 10.10.2017, nowhere records that the wife of the Petitioner was taking treatment of Parkinson disease since the year 2006.  Only the history of symptoms of the disease, of which Petitioner’s wife was suffering, was recorded in the discharge summary. As such it cannot be inferred that the Petitioner or his wife had knowledge about the disease prior to taking Mediclaim Policy.

5. The Clause 4 (e)(xviii) of the Terms and Conditions of the Policy has no application in the facts and circumstances of the present case.  The Clause would have been applicable if Petitioner’s wife was under treatment at the time of purchase of the said Policy and not otherwise.  The State Commission wrongly interlinked the contents of the Proposal Forum and the discharge summary of Jaslok Hospital, Mumbai. 

6. The State Commission did not appreciate that the Petitioner and his family including his wife were medically examined by the Doctor authorized of the Respondents and that Doctor did not report that the wife of the Petitioner was a patient of Parkinson.  The Respondents have also not controverted the said fact. 

7.         Heard counsels of both sides.  Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

7.1       In addition to the averments made under the grounds (para 6), the petitioner contended that the District Forum vide its order dated 04.01.2017 allowed the Complaint and directed the Respondents to pay the claim amount of Rs.16,06,946/- with interest @9%  per annum w.e.f. date of filing of Complaint till realization thereof and also awarded Rs.5,000/- being the litigation expense within two months to the Petitioner. It is contended that  the Respondents failed to bring any evidence on record to prove that prior to treatment of Petitioner’s wife  at Jaslok Hospital, Mumbai, she had underwent the treatment of Parkinson disease at some other Hospital/Doctor.  It is also contended that the Petitioner and his family including his wife were medically examined by the authorized Doctor of the Respondents and that Doctor did not report that the wife of the Petitioner was a patient of Parkinson.  The Respondents have also not controverted the said fact. 

7.2       On the other hand Respondents contended that as per the guidelines of IRDAI and as per the internal policy of the Respondent Company, the said medical insurance is offered to the customers based on the information given by the customers in the Proposal Form, the intent of which is for the Insurance Company to weigh the risks involved while deciding as to whether said Proposal Forum shall be accepted by the Insurance Company and also to determine the premium payable for the insurance cover.  It is further contended that the coverage amount under the Policy with National Insurance Company was only Rs.5 Lakh whereas the Petitioner being aware about the disease of  his wife and the prospective expense for treatment of Parkinson disease, in a planned manner obtained the policy with enhanced sum assured of Rs.20 lakh from the Respondent.  In the said Proposal Forum, deliberately concealed/ did not disclose the past adverse medical conditions of his wife and that she had been suffering from tremors in her hands since 2006 and trembling of feet since 2009-2010.  Also, since 2010 she has been having speech problem and since 2012 she has been suffering from difficulty in movement, which was later on discovered in the discharge summary of Jaslok Hospital. It is further contended that as per the medical underwriting requirements, the proposed insured are subjected to medical examination in cases, where the Insurer is more than 50 years of age or the proposed insurer reveals any disease in the medical history in the proposal form and based on the information revealed by the Petitioner and his wife, as per the Policy of the Respondent Company, a standard and basic Pre-Policy Medical Examination was conducted.  Even then the Petitioner gave false declarations and as there was no mention of Parkinson disease or its symptoms and no tests related to the said disease were conducted.  Even if the Company has conducted medical examinations, it in no manner absolves the liability of the Proposer/Complainant to make true and correct disclosures in the Proposal Form. It is further contended that upon receipt of the claim for the treatment/surgery for Brain Stimulation for the treatment of Advanced Parkinson’s disease at Jaslok Hospital, Mumbai, as is reflected in the discharge summary, the Respondent Company conducted its investigation when it was found that Petitioner’s wife had concealed vital information regarding adverse medical conditions in the Proposal Form.  Therefore, in terms and conditions of the Policy/Contract of Insurance, the Respondent Company repudiated the claim and further cancelled the Insurance Policy on Petitioner’s request. The District Forum allowed the complaint filed by the Petitioner.  The Appeal filed by the Respondents against the District Forum’s order has been allowed by the State Commission.  The petitioner has concealed the fact of medical condition from which his wife was suffering since 2006 but the same were revealed to the treating doctor while taking the treatment in Jaslok Hospital so that the treatment could be taken in due process and line of treatment does not go wrong in absence of incorrect or incomplete past disease progression history.  The Discharge Summary filed by the Complainant itself reveal that his wife was having tremors in left upper limb since 2006 along with restricted joint moments and impaired speech too and the same was not disclosed at the time of purchase of the policy.  The State Commission while allowing the Appeal also observed that per contra the Complaint itself the contention of the Petitioner herein was that his wife was suffering from advance stage of Parkinson and the discharge summary submitted by him clearly states that his wife was suffering from pre-existing disease at the time of purchase of the policy, the insurance company cannot be held liable for deficiency and the claim should have been rejected.  It is also contended that the Advanced Parkinson is not an overnight disease which occurs suddenly but  the said disease progresses/grows in few stages.  The Parkinson’s disease (Parkinsonism) is marked by the presence of certain recognizable symptoms, which include uncontrollable shaking or tremor, lack of coordination and speaking difficulties.  However, symptoms vary and may worsen as the disease progresses. In support of their contentions, the Respondents have relied upon the judgments of Hon’ble Apex Court in case of Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. (2010) 10 SCC 567 and Reliance Life Insurance Co. Ltd. & Ors. Vs. Rekhaben Nareshbhai Rathod (CA/4261/2019).

8.         The claim of the petitioner herein has been repudiated by the Insurance Company on the ground of suppression of material facts with respect to the pre-existing ailments. The respondent Insurance Company has relied upon discharge summary of Jaslok Hospital. The learned Counsel for Respondent Insurance Company contended that the diseases in question, even if declared, were covered under the exclusion clauses, in particular the permanent exclusions, under which Parkinsons or Alzheimer are excluded. Extract of relevant paras of repudiation letter dated 18.06.2014 is reproduced below:

Subject : Member Reimbursement Statement for Claim Number 81158.

 Dear Sir/Madam

This is with reference to your claim filed with us. The details are mentioned below: Insured Person Name                                           :  RAJSHREE CHOUDHARI

Member Number                             :

Proposer Name                               : Mr. MAHIPAL CHOUDHARI

Policy Number                                : 30117014

Hospital Name                                : Jaslek Hospital & Research Centre

Diagnosis/Treatment                                   : ADVANCED PARKINSON'S DIS

Date of Admission                           : 07/04/2014

Date of Discharge                           : 17/04/2014

Clain Status                                                : Denied

Payment Details

Claim Details

9.         The only document relied upon by the Respondent/Insurance Company in support of their case is the discharge summary dated 17.04.2014 of Jaslok Hospital.  Extract of relevant paras of which are reproduced below:

“Clinical Summary

Mrs. Rajshree Choudhari, 47/F, started having tremors in left upper limb in 2006 alongwith slowness of movements. She was not able to perform fine movements like climbing, wearing clothes etc. it progressed to involve right upper limb over next 3 months. She developed similar complaints in both the lower limbs after 3-4 years. She has also developed some difficulty in speech since 4 years and complaint of imbalance while walking since 1½ years. She has developed hallucinations since last 6 months. She has fluctuating ON-OFF periods.

xxxx

Her general examination was normal. Apart from the findings of Parkinson's disease the neurological examination was also normal. She was in ON phase with dyskinesias in neck and all the limbs. There was no rigidity or bradykinesia. EOMs were in full range. DTRs were normal and plantars were flexors. She was able to walk without any difficulty. The motor UPDRS score in the OFF phase was 34/108 and in the ON phase was 12/108. Mini mental status examination, score was 30.”

10.       It is the case of Petitioner/Complainant that at the relevant point of time (i.e. filing of proposal form), neither the Petitioner nor his wife was aware that the wife of Petitioner was suffering from Parkinson disease, as such question of suppressing the same from the Respondent/Insurance Company does not arise.  Therefore, there was no suppression of material facts from the side of the Petitioner.  Petitioner has also contended that had the Petitioner or his wife were aware in the year 2006 that wife of Petitioner is suffering from Parkinson disease, then they would not have waited for her treatment till the year 2014 only for taking benefit of mediclaim policy.  Onus to prove that policy was obtained by misrepresentations or concealment, is on the Insurance Company and they have not discharged their burden with any cogent and reliable evidence/proof.  The discharge summary on which reliance is placed nowhere records that the wife of the Petitioner was taking treatment of Parkinson disease since the year 2006.  Only the history of symptoms of the disease, of which Petitioner’s wife was suffering, are recorded in the discharge summary, hence it cannot be inferred that Petitioner or his wife had knowledge about the disease prior to taking mediclaim policy. 

11.       State Commission while allowing the Appeal filed by the Respondent Insurance Company has observed as follows:

“It is not in dispute that the proposal form was submitted on behalf of the complainant respondent in which questions as regard to health of insured were answered in negative and it has also been stated that she had not experienced any health problem or medical condition within last three months for which she has not seen the doctor meaning thereby that even she has not been experienced any health problem within three months of purchase of the policy but Discharge Summary of Jaslok Hospital Ex. P3 which has been relied by the complainant respondent himself reveals that she started having tremors in left upper limb in 2006 alongwith slowness of movements. She was not able to perform fine movements like climbing, wearing clothes etc. it progressed to involve right upper limb over next three months. She developed similar complaints in both the lower limbs after 3-4 years. She has also developed some difficulty in speech since 4 years and complaint of imbalance while walking since 1½  years. She has developed hallucinations since last 6 months. She has fluctuating On-OFF periods.

This clinical summary clearly shows that insured having experienced health problem since 2006 but these facts have not been disclosed at the time of purchase of the policy.

The other contention of the respondent is that at the time of purchase of the policy she was medically examined. Be that may be the case, the discharge summary clearly shows that her general examination was normal and medical examination at the time of purchase of the policy cannot absolve the insured of his liability to furnish correct information as the medical check up by the doctor of the insurance company is a routine check up broadly on the basis of reply given by the insured and it is the duty of the insured to furnish correct information and reliance could be placed on the judgment passed by the National Commission in Revision Petition No. 1585/2011 LIC of India Vs. Kusum Patro where the National Commission has held as under:

“Failure of the Medical Officer to record nothing except 'No' in reply to any of these questions can only show his complete and gross incompetence (including perhaps collusion) in examining the life-to-be assured but that cannot absolve the latter of his responsibility to furnish correct information regarding the status of his health which he alone was aware of and should have disclosed in keeping with the principle of 'utmost good faith' which forms the bedrock a contract of insurance."

Hence going through medical examination could not absolve the insured from the responsibility of giving correct information. The respondent has relied upon 1 (2000) CPJ 1 (SC) Modern Insultors Ltd. Vs. Oriental Insurance Co. where exclusion clause was not disclosed to the insured which is not the case here as the insured was taking the policy since 2009.

xxxx

Per contra in the complaint itself the contention of the respondent was that Rajshree was suffering from advance stage of Parkinson. Reliance has also been placed on IV (2010) CPJ 229 (NC) Oriental Insurance Co. Vs. Vikram Sabharwal where no record of treatment was furnished. Here in the present case discharge summary of Jaslok Hospital submitted by the respondent clearly states that Rajshree was suffering from health problem since 2006. This may also be noted that as per claim form the hospitalization was planned meaning thereby that the insured was knowing well that she is suffering from Parkinson.

Hence, in view of the above that material facts have been suppressed as regard to the health condition. The insured was suffering from pre-existing disease at the time of purchase of the policy, the insurance company cannot be held deficient and the claim should have been rejected.”

12.       District Forum while allowing the Complaint, has observed as follows:

“6- This is the settled principle of law that when any insured person breach the insurance policy then he cannot be held entitled for receiving any insured amount. On the other hand if the non-complainants come to the court with this fact that the complainant has breached the policy of insurance, then they are required to prove the facts with the cogent evidence. It has been alleged by the non- complainants that wife of the complainant was very well in knowledge that she was suffering from the Parkinson disease, because as per medical report her hands starting to be trembled since, 2006, but no evidence has been filed by the non-complainant in this regard whereby this fact can be proved that prior to taking treatment from the Jaslok hospital from Mumbai wife of the complainant took treatment of Parkinson from anywhere else. No certificate of any competent officer is available on the record whereby it can be proved that the wife of the complainant was suffering from Parkinson disease since 2006.

7- Secondly, if the wife of the complainant in his past history has mentioned in that her hands were trembling earlier. Then, only by this fact it cannot be proved that wife of the complainant was suffering from Parkinson disease and she had knowledge about this and she has got herself insured by taking insurance policy by concealing the facts.

8- Thirdly, the complainant has not got insurance policy in the said year, but the complainant is getting mediclaim health insurance policy since, 2009. If wife of the complainant was suffering from the Parkinson disease then she might have taken treatment during these five years and then the complainant will have taken claim of the said year from the insurance company, but such kind of facts are not revealed by perusing the record.

9- It is also to be mentioned here that at the time of insuring the complainant and his family they were medically examined by the authorized doctor namely Sh. Sanjeev Garg, but no rebuttal of this fact has been given by the non- complainant. If there was any disease then in the medical checkup this fact of trembling of hands and legs would have come in the medical checkup, but no evidence in this regard is available on the record. Therefore, no such ground is available on the record to hold this that wife of the complainant has concealed this fact and that the non- complainant has got right to cancel the mediclaim policy. Our inference is supported by the order passed by the Hon'ble National Commission in the matter of Revision Petition no.558/1997, M/s United India Insurance Co. Ltd. Vs. Gurdeep Singh Oberoi and decision of the Hon'ble State Commission, Mumbai passed in First Appeal No.94/2008 the United India Insurance co. ltd. Vs. Shri Padmakar Dhondopant Panse.

10- Thus, the non-complainant has committed deficiencies in service by rejecting the claim of the complainant. Therefore, the complainant is entitled to recover the claimed amount of Rs. 16,06,946.28/- along with interest and cost of the complaint.

ORDER

On the basis of the above mentioned analysis complaint of the complainant against the non-complainant is allowed and it is ordered that the non-complainant shall paid an amount of Rs.16,06,946.28/-(Rupees Sixteen Lac Six Thousand Nine Hundred Forty Six and Twenty Eight Paise) and interest on this amount at the rate of interest 9 percent from the date 28.11.2014 to the date of actual realization of the amount. Since, interest amount is being given, therefore it is not just to grant compensation amount, even otherwise also the non-complainant shall pay rupees 5,000/- (five thousand) to the complainant within a period of two months from today.”

13.       As regards contentions of the Respondent/Insurance Company that the diseases in question, even if declared, were covered under the exclusion clauses, in particular the permanent exclusions, under which Parkinsons or Alzheimer are excluded. It is seen that this is not mentioned as one of the ground in the repudiation letter dated 18.06.2014 cited.  Hon’ble Supreme Court in a catena of cases (Galada power & Tele Communications Ltd. Vs. United India Insurance Co. Ltd., (2016) 14 SCC 161, Saurashtra Chemicals Ltd. Vs. National Insurance Co. ltd. (2019) 19 SCC 70, JSK Industries (P) Ltd. Vs. Oriental Insurance Co. Ltd. (2022) 17 SCC 340), New India Assurance Co. Ltd. Vs. Mudit Roadways (2014) 3 SCC 193) have held that Insurance Company cannot travel beyond the grounds mentioned in the repudiation letter. In Mudit Roadways (Supra) Hon’ble Supreme Court observed:

“34. Canvassing supplementary arguments during the hearing, (beyond those in the insurer’s repudiation letter), is explicitly prohibited. Consequently, it is held that the insurer cannot introduce additional reasoning beyond those detailed in their letter, to justify the repudiation.”

Hence, Insurance Company cannot now raise this ground at the stage of Revision Petition.  Hence, the only point we would be considering is whether there was any suppression of material facts in the proposal form as alleged by the Insurance Company and whether Insurance Company has discharged its burden of proving the suppression of such alleged suppression of material facts. 

14.       As has been held by Hon’ble Supreme Court in catena of judgments[1] suppression of material facts relating to pre existing ailments in the proposal form entitles the Insurance Company to repudiate the claim.  However, as was held by Hon’ble Supreme Court in LIC of India Vs. G M Channabasamma (1991) 1 SCC 357, burden of proving that  insured made false representations and suppressed material facts is undoubtedly on the Insurance Company.  In Mahakali Sujatha Versus Branch Manager, Future Generali India Life Insurance Company Limited & Anr. (2024) 8 Supreme Court Cases 712, the Hon’ble Supreme Court held that the cardinal principle of burden of proof in the law of evidence is that ‘he who asserts must prove’, the onus cannot be shifted on the insured to deal with the issues that have merely been alleged by the insurer without producing any evidence to support that allegation.  Hon’ble Supreme Court observed, though the proceedings before the Consumer Fora are in the nature of summary proceedings, yet the elementary principles of burden of proof and onus of proof would apply.  The insurer has to establish that the non-disclosure or, as the case may be, the submission of false information was fraudulently made and that the policy holder while making it knew falsity of the statement or of the suppression of facts which were material to disclose.  If a fact, although material, is one which the proposer did not and could not in the particular circumstances have been expected to know, his failure to disclose is not a breach of his duty.  Hon’ble Court further held in this case:

“35 Full disclosure must be made of all relevant facts and matters that have occurred up to the time at which there is a concluded contract. It follows from this principle that the materiality of a particular fact is determined by the circumstances existing at the time when it ought to have been disclosed, and not by the events which may subsequently transpire. The duty to make full disclosure continues to apply throughout negotiations for the contract but it comes to an end when the contract is concluded; therefore, material facts which come to the proposer’s knowledge subsequently need not be disclosed.

36. Thus, a proposer is under a duty to disclose to the insurer all material facts as are within his knowledge. The proposer is presumed to know all the facts and circumstances concerning the proposed insurance. Whilst the proposer can only disclose what is known to him, the proposer’s duty of disclosure is not confined to his actual knowledge, it also extends to those material facts which, in the ordinary course of business, he ought to know. However, the assured is not under a duty to disclose facts which he did not know and which he could not reasonably be expected to know at the material time. The second aspect of the duty of good faith arises in relation to representations made during the course of negotiations, and for this purpose all statements in relation to material facts made by the proposer during the course of negotiations for the contract constitute representations and must be made in good faith.”

15.       In this case, the only document/evidence, on which reliance is placed by the Respondent Insurance Company in support of their contention of suppression of material fact relating to pre-existing ailments in the Discharge Summary dated 17.04.2014,  relevant extract of which has already been reproduced under para 9.  A careful perusal of this document shows that this records the symptoms of the patient at the time of admission, as told by the patient/their family members.  There is no other document/evidence on record which will show that the insured was suffering from pre-existing ailment of Parkinson disease at the time of filling the proposal form.  We see some merit in the contention of the Petitioner that had the Petitioner or his wife been aware in the year 2006 that wife of Petitioner is suffering from Parkinson disease, they would not have waited for her treatment till the year 2014 only for taking benefit of mediclaim policy.  Hence, in the given facts and circumstances of the case, we are of the considered view that the Respondent Insurance Company has failed to discharge its onus of proving suppression of material facts related to pre-existing ailments with any cogent and reliable evidence/proof.  The discharge summary on which reliance is made does not record that the wife of Petitioner was taking any treatment of Parkinson disease since 2006.  Hence, even if there were some symptoms as recorded in the discharge summary, benefit of doubt goes to the insured of her having no knowledge about the Parkinson’s disease prior to taking mediclaim policy. 

16.       In view of the foregoing, we hold that order of the State Commission suffers from a material irregularity and cannot be sustained.  Accordingly, order of the State Commission is set aside, Revision Petition is allowed and order of the District Forum is restored.

17.       The pending IAs in the case, if any, also stand disposed off.