This complaint coming up before us for final hearing on                      01-06-11 in the presence of Sri K.V.R.H.Prasad, Advocate for complainant and of Sri P.Ramanjaneyulu, advocate for opposite party, upon perusing the material on record, hearing both sides and having stood over till this day for consideration, this Forum made the following: 

O R D E R

PER SMT.T.SUNEETHA, LADY MEMBER:

                This complaint is filed under section 12 of the Consumer Protection Act, 1986 by the complainant seeking directions on opposite party to pay Rs.1,50,000/- with interest @ 12% p.a. from the date of complaint till the date of realization and to award Rs.5000/- towards costs.

2.      The brief facts of the case are as follows:

                The complainant has taken Health Insurance Policy bearing No.396718009 from opposite party on 24-08-11, which covers the medical expenses incurred for the treatment. On 27-03-10, the complainant admitted in Star Hospital, Hyderabad with a complaint of shortness of breath.  The hospital conducted operation for heart i.e., CABG x 3 Grafts (Lima LAD, AO SVG OM & AO SVG Distal RCA) on        30-03-10 and she was discharged on 06-04-10.  The complainant paid medical expenses of Rs.1,50,000/- to the hospital authorities. The complainant submitted the bills to opposite party claiming policy amount. The opposite party repudiated the claim by letter dt.20-05-11 that in the proposal form it was noted that she has no blood pressure and diabetes.  The complainant is entitled to hospital charges incurred by her under the policy.  The repudiation of claim by opposite party is illegal, which amounts to deficiency of service.  Hence, the complaint.

3.      The opposite party filed its written statement, which is in brief as follows:

                  As per discharge summary issued by Star Hospital, Hyderabad dt.06-04-10, it has been confirmed that the complainant is suffering from diabetes type II and was on insulin treatment for the same for last one year and hypertension for last 2 years i.e., prior to signing proposal form. 

                In the proposal form under ‘part D’  for providing medical and life style details of insured, the following question on page 4 was answered as no by the complainant

                3: Are you now or have you ever been diagnosed with any of the following conditions.  If yes, please provide details or attach relevant questionnaire

1. Hypertension or high blood pressure – ‘NO’

1. Diabetes – ‘NO’

                Moreover the complainant had also singed a declaration in column E with respect to complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of proposal form about his health.  On 18-05-10, the opposite party cancelled the policy on the ground of suppression of material fact by the complainant while filling the proposal form.   

                There has been a willful concealment of vital information at the time of filling proposal form by the complainant i.e., non-disclosure of Hypertension and diabetes for the past two years and one year respectively prior to proposal signing which amounts to material medical non-disclosure.  Had the opposite party known about the complainants past medical history at the proposal stage, the policy would not have been issued as proposed.  The opposite party in their written arguments quoted number of cases in support of their case.

4.             Both parties have filed their respective affidavits. Ex.A1 to A3 on behalf of complainant and Ex.B1 to B5 on behalf of opposite party were marked.

5.      Now the points for consideration are

1. Whether there is any deficiency of service on the part of opposite party?
2. To what relief the complaint is entitled to?

6.      POINTS 1 & 2

                The complainant took the policy on 24-08-09.  She was admitted in the hospital on 27-03-10. Subsequently she underwent surgery for CABG x 3 Grafts (LIMA->LAD, AO->SVG-> OM & AO-> SVG-> Distal RCA) on beating heart, mild cardiomegaly (apperent mid inspiratory study) on 30-03-09 for her heart disease.  In discharge summary given by the Star Hospital authorities, which is duly signed by Dr. Satyendranath Pathuri, in the column of history of present illness it is written “a known hypertensive for the last 2 years. A known diabetic for the last one year on insulin.”

7.             The opposite party took the contention that the complainant is having the diabetes and hypertension prior to taking policy with them, which amounts to suppression of material medical facts.  While filling the proposal form under ‘part D’, the complainant gave mis-statement about her health condition regarding hypertension and diabetes in the following manner:

                3: Are you now or have you ever been diagnosed with any of the following conditions.  If yes, please provide details or attach relevant questionnaire

1. Hypertension or high blood pressure – ‘NO’

1. Diabetes – ‘NO’

                The complainant had also signed declaration in column E with respect to complete true and accurate disclosure of all the facts as below:

                   “I/We hereby declare that I/We fully understand the meaning and scope proposal form and the questions contained above and am submitting the completed proposal of my/our own volition, and confirm that I/we have not been induced by anyone to make the proposal.  I/We have been explained by the agent of MNYL of the nature of questions and the importance of disclosing all material information. I/we further declare that the statements and declarations herein shall be basis of a contract between me/us and the company and that I/we have made complete, true and accurate disclosure of all facts and circumstances as may be relevant, and have not withheld any information that may be relevant to enable the company to make an informed decision about the acceptability of the proposal. Should any statement/s be incomplete, false, wrong inaccurate, or should there be any omission/s on my/our part in disclosing the relevant information, the company shall have the right to cancel the policy, if issued, and forfeit any payments received.”   

8.             The opposite party filed the following citations:

1. Life of India and others Vs. Smt.Asha Goel and another (2001) ACJ 806.  In this case regarding non disclosure and misstatement of material facts, it was held that the contracts of insurance including the contract of life assurance are contracts uberrimae fides and every fact of material must be disclosed otherwise there is good ground for recession of the contract. 
2. Satwant Kumar Sandhu Vs New India Assurance Company Ltd. (2009) 8 SCC 316, the Supreme Court observed that “in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept the risk is a material fact.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Needless to emphasize that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance. 
3. New India Assurance Company Ltd. Vs. Shri Vishwanath Manglunia, National Commission, New Delhi, by order dated April 12, 2010 observed that the respondent/ complainant had deliberately failed to disclose that he had a medical history of suffering from Hypertension and Ischaemic Heart Disease (IHD) for a number of years.  In particular, he had suppressed the fact that he was admitted into Hospital for two days. The hospital records revealed that he was suffering from Coronary Artery Disease (CAD), particularly, Antero-Septal Myocardial Infarction (Ant.-Septal MI) with Hypertension Stage-lic and Left Bundle Branch Block (LBBB).  These facts, were suppressed from the petitioner/New India Assurance Company Limited at the time of obtaining mediclaim policy hence, the appeal was allowed.
4. I (2011) CPJ 83 (NC) between LIC of India Vs. Dalbir Kaur, the National Commission held that the life assured prior to taking policy had been admitted in the Sony Nursing Home w.e.f. 08-05-1999 to 16-05-1999 for treatment of gastroentitis.  He was again admitted in same Nursing Home from 01-02-2002 to 28-02-2002 for treatment of Typhoid, Jandice and Disc problem.  He remained on leave from his place of work for over two months. He continued to be under treatment as an out patient in the same Nursing Home till 22-04-2002 i.e., just before taking the policy on 31-05-2002. On 17-11-2002 he was again admitted in the hospital where he ultimately died on               29-11-2002 of septicemia. 

              The District Forum after hearing both parties allowed the complaint by concluding that the insured had not deliberately made false statements since there was no pre-existing disease which caused his death and directed the opposite parties to pay the respondent entire insured amount with 8% interest and compensation there of. 

                The State Commission also confirmed the order of District Forum.  The National Commission made the following observations:

                The insured had willfully given wrong replies to the specific questions relating to his health thus suppressing facts in his insurance declaration.  This declaration would be the basis of a contract of insurance between him and the Life Insurance Corporation of India and that if “any untrue averment be contained therein the said contracts shall be absolutely null and void and all moneys which shall have been paid in respect therefore shall stand forfeited to the corporation.”  If the declaration made is found to be false to the knowledge of the declarent.  The insurance company is entitled to repudiate the claim.      

5.     IV (2010) CPJ 80 (NC) between Daya Kaur Vs. LIC of India and another, the National Commission, New Delhi. Claim repudiated on the ground of suppression of material fact  that the deceased gave wrong answer to question No.11 in proposal form in regard to his statement of health.  Life assured was a drug edict and he died due to heart attack.  The petitioner submitted that there was no nexus between cause of death and he taking the drugs.  The National Commission held non-disclosure of taking of drug for the last 5 to 6 years by the life assured was a material fact which he had deliberately suppressed in the proposal form.  Hence, there is no illegality on the part of opposite party.  Hence, revision petition dismissed.      

6.     IV (2010) CPJ 86 (NC) between Kokilaben Narendrabhai Patel Vs. LIC of India.  The opposite party repudiated the claim that insured did not disclose that he was suffering from enteric fever 11 months prior of taking policy.  This amounts to suppression of material facts.  The insured died due to heart attack.  The National Commission held that “there was clear suppression of material facts with regard to his health and the insured was fully justified in repudiating the contract of insurance.” 

7.     IV (2010) CPJ 337 (NC) between Sunita Rani and others Vs. LIC of India, where the insured died due to heart attack.  Insured was suffering from tuberculosis.  Opposite party repudiated the claim on the ground of suppression of material facts.  The NC held there was clear suppression of material facts in regard to the health of the insured and therefore, the respondent insurer was fully justified in repudiating the insurance contract. 

9.                It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and if the declaration made is found to be false to the knowledge of the declarant then the insurance company is entitled to repudiate the claim.  In Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., VI (2009) SLT 338 wherein the Supreme Court observed that “the term ‘material fact’ is not defined in the Act and, therefore, it has been understood and explained by the courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk.  Any fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be ‘material’.”                   

10.           In the present case, the complainant did not disclose the facts about she suffering from diabetes and hypertension prior to taking policy, while filling the proposal form with opposite party, which clearly amounted to suppression of material facts.  Therefore, the repudiation of opposite party is justified.  Hence, there is no deficiency of service on the part of opposite party.     

                In the result, the complaint is dismissed without costs.                          

Typed to my dictation by the Junior Steno, corrected by us and pronounced in the open Forum, this the 8^th day of June, 2011.     

         Sd/- x x x                                                                 Sd/- x x x

          MEMBER                                                                         PRESIDENT          

 APPENDIX OF EVIDENCE

                                        DOCUMENTS MARKED

For Complainant:         

For opposite party:

                                                                                               Sd/- x x x

                                                                               PRESIDENT