ORDER

(Per: Mrs. Veena Sharma, Member):

This appeal, under Section 15 of the Consumer Protection Act, 1986, has been preferred by Insurance Company against the order dated 14.09.2010 passed by the District Forum, Haridwar in consumer complaint

No. 75 of 2008, whereby the District Forum has allowed the consumer complaint against the insurance company and directed them to pay to the complainant an amount against both of two insurance policies within one month from the date of order and also to pay Rs. 10,000/- towards damages expenses.

2.       Briefly stated the facts of the case, as mentioned in the consumer complaint, are that the complainant-Smt. Manki Devi has filed this consumer complaint against the opposite parties-insurance company against the claim of his husband’s insurance.  The complainant has stated in her complaint that her husband had taken two life insurance policies vide No. 2710847598 and 271087681, each policy for sum assured of             Rs. 50,000/- with monthly premium of Rs. 359/- and Rs. 479/- during his life time.  On 23.12.2005, the complainant’s husband died.  Thereafter, she contacted insurance company for claim of his husband’s insurance polices, but the insurance company did not take any concern about her claim, which she claimed.  Insurance company sent a letter through post, stating therein that the policy amount cannot be paid, as prior to issue policy her husband had concealed the facts about his health. The complainant’s husband died during the time continuation of policy and, hence, by repudiation of claim, there was a deficiency in service on the part of insurance company.

3.       The opposite parties-insurance company has filed its written statement.  In their written statement, the insurance company has stated that after perusal of investigation report and other documents procured during investigation, the opposite parties came to know through documents, statement issued from the doctors, who treated the complainant.  The fact came to know that the husband of the complainant concealed the facts about his disease and habits at the time of taking insurance policies. 

4.       The District Forum, after an appreciation of the facts of the case, partly allowed the consumer complaint vide its order dated 14.09.2010 in the above manner.  Aggrieved by the said order, the opposite parties-insurance company has filed this appeal.

5.       We have heard learned counsel for the appellants-insurance company Mr. Deepak Ahluwalia and have also perused the record.  None appeared on behalf of the respondents.

6.       In appeal, the appellants have admitted that two life insurance policies No. 271087681 and 271084759 for Rs. 50,000/- each were purchased by life assured Sh. Mahesh Prasad, husband of complainant. The appellants agreed to cover the risk on the life of life assured Sh. Mahesh Prasad on the basis of the replies given to the queries asked in aforesaid proposal forms dated 31.08.2004 and 28.02.2003.  Under the two proposal forms for the said policies, the life assured had signed declarations therein, wherein it was clearly mentioned that if the averment be found to be untrue, the contracts with respect to the said policies, would be null and void. On investigation, it has come to the knowledge that the said policies were obtained by deliberate concealment of material facts and also about ailments of the life assured.  There were false declarations given in two proposal forms regarding queries asked therein.  The claims were, thus, repudiated vide detailed letter of repudiation dated 18.09.2006, hence, there is no deficiency in service on the part of the appellants. On investigation, it has been gathered that prior to taking of the said policies.  It is investigated, that the deceased life assured not only was chronic alcoholic since the last 30 years, but he had been suffering from jaundice, poor appetite and swelling in abdomen and it was ascertained that the cause of death of life assured was Cirrhosis of liver with Ascitis which was related to the diseases suppressed when the said proposal forms were filed and declarations given.  The life assured died within two years’ of taking of said policies and there exists direct nexus between the diseases suppressed and cause of death.  Life insurance contracts unlike other contracts are based on the principle of Uberrimae Fides, i.e. of utmost good faith.  Under section 45 of the Insurance Act, the appellants, i.e. Life Insurance Corporation is well within its rights to repudiate the claim, if it is found on investigation that there was material withholding and concealment of state of health. In the present case, there has been material withholding and concealment of state of health by the deceased life assured.  The District Forum has ignored and not appreciated the evidence produced by the appellants. Lastly, insurance company humbly prayed that the impugned judgment and order passed by the District Forum be set aside, the consumer complaint be dismissed and the appeal may be allowed.

7.       Learned counsel for the appellants has contended before this Commission that the judgment and order passed by the District Forum is not sustainable, because the District Forum has failed to appreciate that the insurance policy was obtained by life assured by concealment of his previous ailment.  In support of this contention, learned counsel for the appellant has taken our attention that through proposal form submitted by the life assured, wherein the column of personal history in response to the questions-

a) Are you suffering from or have you ever suffered from ailments pertaining to lever, stomach, heart, lungs, kidney, brain or nervous system?     The life assured had answered “No”. 

b) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other disease? The life assured had answered “No”.

c) Do you use or have ever used alcoholic drink?  The life assured answered “No”. 

Learned counsel has also contended that the District Forum while accepting the consumer complaint of the complainant has failed to appreciate that the medical report pertaining to the treatment of the life assured, it is clearly indicated that as per the information conveyed to the treating doctor, which was filled up by doctor of the deceased in his last illness. This information has been collected from the medical attendant’s certificate (claim form “B”).  In response to the question from the doctor;

Question                                                                                     Answer

a) what was the exact cause of death? (Besides defining the disease or other cause of death in such terms as you consider appropriate, kindly add the distinctive technical name).                    

Answer- (1) Primary cause- cirrhosis of liver, type-2 diabetes mellitus. (2) Cardiac respiratory failure.

b) Was it ascertained by examination after death or inferred from symptoms and appearance during life?

Answer “inferred from symptoms and appearance during life”.

c) How long had he been suffering from this disease before his death?

Answer- approximately two years.

d) What were the symptoms of the illness?

Answer-Jaundice, swelling of abdomen.

e) What other disease or illness (i) preceded (ii) or co-existed with that which immediately caused his death?

Answer- None other than mentioned above.

          So medical attendant’s certificate shows that the patient was having history of diabetes mellitus and liver cirrhosis since two years before taking the insurance policies.  It is contended that from the said report, it is clear that the life assured concealed the information obtaining the said insurance policies. 

8.(i)   Learned counsel for the appellants has placed reliance on the case of Satwant Kaur Sandhu vs. New India Assurance Company Ltd., IV (2009) CPJ 8 (SC).  In this case, the Hon’ble Supreme Court has held that (i) contract of insurance, contract of uberrimae fidei – insured under obligation to make true and full disclosure of information, within his knowledge – insured on regular hemodialysis, fully aware of state of health – Statement made in proposed form as to state of health palpably untrue to his knowledge – Suppression of material facts proved – Repudiation of claim justified. (ii) “Material” means and includes all “important”, “essential” and “relevant” information in context of guiding insurer to decide whether to undertake the risk or not.  

(ii)     In the case of The Marketing Manager, L.I.C. of India vs. Smt. S. Vijaya; Revision Petition No. 162 of 1994, Decided on 13.12.1994, the Hon’ble National Commission has held that according to the diagnosis, as noted in the Discharge records of the hospital the insured was suffering from Cirrhosis of liver and he was chronic alcoholic from about 10 years, and he had three attacks of jaundice. It is evident that in the personal health statement submitted by the insured just prior to the revival of policy, he had suppressed the material facts concerning his health.  As such, the repudiation of the policy by the Life Insurance Corporation was fully warranted and there has been no deficiency in service.

(iii) In the case of Usha Rani Gupta and Anr. vs. Life Insurance Corporation & Ors., II (2013) CPJ 257 (NC), the Hon’ble National Commission has held that the assured was suffering from the disease for more than a year, it was obligatory on his part to give correct answers at the time of revival of insurance policy and as insured suppressed facts regarding disease and gave false answers, the opposite party has not committed any deficiency in service in repudiating claim of the complainant.

(iv) In the case of Tata AIG Life Insurance Co. Ltd. vs. Orissa State Co-operative Bank & Anr.; IV (2012) CPJ 310 (NC), the Hon’ble National Commission has held that it is not for the proposer to determine whether the information sought for is material for the purpose of policy or not – Deceased has suppressed the ailment while signing the proposal form – Medical report shows that deceased had diabetic foot – Cause of death has been shown due to chronic renal failure – Insured died within six or seven months of obtaining of insurance policy – Impugned order set aside – Repudiation justified.

(v) In the case of Maya Devi vs. Life Insurance Corp. of India, III (2011) CPJ 43 (NC), the Hon’ble National Commission has held that contention, deceased was chronic patient of diabetes and illness concealed in form – Accepted – Insurance policy is an agreement in utmost good faith between insurer and insure and any breach of this agreement by suppressing material facts on part of insure would result in repudiation of claim by insurer. 

(vi) In the case of Life Insurance Corporation of India and Anr. vs. G. Sahsi Kalavathamma; II (2015) CPJ 703 (NC), the Hon’ble National Commission has held that insurance (Life) – Death claim – Suppression of pre-existing disease – Violation of conditions of policy – Insured has given wrong answers about previous treatment, hospitalization and absence from work regarding health in proposal forms – Repudiation justified.

(vii) In the case of Life Insurance Corporation of India and Ors. vs. Smt. Bhagya; I (2010) CPJ 25 (NC), the Hon’ble National Commission has held that insured chronic alcoholic not disclosed – Suppression of material information regarding status of health and income, proved – Repudiation of claim justified.  The insurance company was well within its rights to repudiate the claim. 

9.       We find merit in the contention of the learned counsel for the appellants.  On perusal of the certificate of hospital treatment (Annexure No. 9/2 paper No. 31/35 on the District Forum’s record), the life assured was K/O Alcoholic and Cirrhosis of liver.  Even as per the medical attendance certificate (Annexure-9 paper No. 31/33 on the District Forum’s record), it is clear that the life assured was suffering from diabetes mellitus type-2.  If the life assured was suffering from diabetes mellitus and type-2 liver Cirrhosis, he obviously was aware of his ailment at the time of filling proposal form dated 28.08.2004, wherein he has concealed his aforesaid ailment from the appellants.  Thus, this is clear case of concealment of material fact regarding previous ailment by the life assured.  That being the case, in view of the judgment of Hon’ble Supreme Court in the matter of Satwant Kaur Sandhu (supra) and other judgments (supra), the appellants cannot be faulted for repudiating the claim on the ground that the insurance policy was obtained by concealment of previous ailment of the life assured. The District Forum has totally ignored the above referred medical evidence.  Therefore, impugned order cannot be sustained.

10.     From the above discussion, we are of the view that the District Forum has not properly considered the facts and circumstances of the case and, hence, erred in allowing the consumer complaint per impugned order, which cannot legally be sustained and is liable to be set aside and the consumer complaint is also liable to be dismissed.  Resultantly, the appeal deserves to be allowed.

11.     For the reasons aforesaid, the appeal is allowed.  Impugned judgment and order dated 14.09.2010 passed by the District Forum, Haridwar is set aside and the consumer complaint No. 75 of 2008 is dismissed with no order as to costs.  The amount of Rs. 25,000/- deposited by the appellants at the time of filing the appeal be released in their favour.