Sri Shyamal Gupta, Member

Challenging the Order dated 03-11-2016, passed by the Ld. District Forum, Kolkata, Unit II (Central) in CC/177/2016, whereof the complaint has been allowed, this Appeal is filed by Apollo Munich Health Insurance Co. Ltd., the OP of the complaint case.

Briefly narrated, case of the Complainant is that, he took a mediclaim policy from National Insurance Co. Ltd. in the year 2011.  Subsequently, he ported the same to the OP Insurance Company w.e.f. 28-09-2015.  He underwent treatment at a private nursing home in between the period from 05-01-2016 to 10-01-2016.  After his  discharge from the nursing home, he claimed Rs. 41,409/- and Rs. 5,314/- from the OP being the treatment cost incurred by him.  However, the said claims being rejected by the OP, the complaint was filed.

In its WV, the OP submitted that the Complainant took the subject insurance policy suppressing his previous medical condition.  Further case of the OP is that, on scrutiny of medical papers of the Complainant, it transpired from a prescription dated 11-08-2015 that he was suffering from Anal Fissure.  Taking strong exception to such evasive act of the Complainant, the instant claim was repudiated.

Decision with reasons

We have heard the Ld. Advocates of the parties in the matter and gone through the documents on record. 

It appears from the record that the Respondent took a mediclaim policy from the National Insurance Co. for the first time on 28-09-2011 and thereafter, he ported the same to the Appellant Company on 28-09-2015. Undisputedly, it was detected on 11-08-2015 that the Respondent was suffering from Anal Fissure and he undergone treatment for such ailment in between the period from 05-01-2016 to 10-01-2016.

There can be no two opinions as to the fact that while filling up the proposal form of the Appellant Company to effect the intended switchover, the Respondent was supposed to make a frank/candid/honest disclosure about his past ailment(s), irrespective of the fact that the previous policies that he took from another company was running for the last 4 years.

This is because, there can hardly be any scope for doubt that information required on the state of health of the Respondent was material facts and answers given to those questions were definitely factors which would have influenced and guided the Appellant to enter into the Contract of Mediclaim Insurance with the Respondent. Let us appreciate that, holding the declaration of the Respondent that he was not suffering from any past ailments as gospel truth, he was issued the policy without any rider.  No doubt, if the Respondent honestly disclosed the fact that he developed Anal Fissure approx. one month before the date of migration, the Appellant would think twice before accepting the proposal form and issuing the policy unconditionally.

All contracts of insurance are contracts of utmost good faith, so both the insurer and insured are under a positive duty to make full disclosure of all material facts and not to make any sort of misrepresentations or mis-descriptions during the negotiations for obtaining the policy. This duty of utmost good faith applies equally to both the insurer and the insured. The duty to observe utmost good faith is ensured by requiring the insurer or the proposer to declare that the statements in the proposal form are true, and that he agrees that they shall be the basis of the contract and that any incorrect or false statements shall render the policy null  and void. The insurer gathers all material facts in prescribed proposal forms which the proposer fills up and signs adding a declaration that the answers are true. If the assured or the insured fails to make any disclosure, the insurer may decline discharging contractual obligations under the policy.

All the material facts which are likely to influence the insurer in deciding the amount of premium payable by the insured must be disclosed by the insured. Failure to disclose material facts renders the contract voidable at the option of the insurer. Very often the insurer has to rely only on the description and details filled in the proposal form. Therefore, any mis-description, misrepresentation or blatantly false declaration made by the assured would result in the insurer paying wrong claims. It is therefore an implied condition or principle of insurance that the assured be required to make a full disclosure of all material particulars within his knowledge about his risk.

In any case, it transpires from the policy documents that the same prescribes a 36 months cooling period in respect of all pre-existing conditions.  It is also stipulated therein that coverage under the policy for any past illness/conditions or surgery is subject to the same being declared at the time of application and accepted by the Appellant without any exclusion.

Since the Respondent underwent treatment for Anal Fissure within 5 months (approx.) of detection of Anal Fissure in him, even if he disclosed such fact, he would not get any reimbursement as the same happened within the 36 months waiting period. 

That apart, since it was a condition precedent that reimbursement in respect of a past ailment/condition would be extended subject to the same being declared at the time of application and acceptance of the same by the Appellant without any exclusion, the past medical condition being not declared in the proposal form, the Respondent was not entitled to any insurance benefit in respect of his treatment for Anal Fissure anyway.

In view of above findings, we cannot endorse the decision of the Ld. District Forum. 

The Appeal, thus, succeeds.

Hence,

O R D E R E D

The Appeal stands allowed on contest against the Respondent.  The impugned order is hereby set aside.