1.       This Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986, has been filed by M/s Aviva Life Insurance Company India Ltd. (for short “the Insurance Company”), challenging order dated 02.07.2009, passed by the State Consumer Disputes Redressal Commission, U.T. Chandigarh (for short “the State Commission”) in Appeal No. 335 of 2009.  Vide the said order, the State Commission has dismissed in limine the Appeal preferred by the Insurance Company, thereby upholding order dated 06.05.2009 of the District Consumer Disputes Redressal Forum-I, U.T. Chandigarh (for short “the District Forum”) in Complaint No. 1212 of 2008, preferred by the Respondent/Complainant.  The District Forum, while allowing the complaint, had directed the Opposite Party, the Insurance Company, to pay to the Complainant the sum assured of Rs.4,95,000/- plus Rs.2,85,000/- as the expenses incurred on the treatment of the Life Assured, the husband of the Complainant, and Rs.2,31,364/- as the expenses incurred on the purchase of medicines, besides Rs.10,000/- as litigation expenses. 

2.       The facts, in brief, giving rise to the present Revision Petition, are that the Respondent/Complainant is the widow of Late Arun Kumar Goyal (for short “the Insured”), who, on 26.02.2007, by paying a single one time premium of Rs.99,000/- had taken a life insurance policy from the Insurance Company, in the sum of Rs.4,95,000/-.  The said policy was to mature on 26.02.2012 and the Complainant was made the nominee in the same.  During the validity period of the said policy, on 08.11.2007 the Insured experienced pain in abdomen, vomiting etc.  He was taken to Silver Oaks Hospital, Sector-63, SAS Nagar, Mohali and was admitted there.  On 10.11.2007 the condition of the Insured became very serious, whereupon he was shifted to ICU, but he went into coma and finally died in the said hospital on 30.11.2007.    

3.       On the death of her husband, the Respondent/Complainant preferred a claim with the Insurance Company. However, by letter dated 09.04.2008, the claim was repudiated on the ground that the deceased Insured had not disclosed the information regarding his health and habits, at the time of taking the policy in question. According to the Insurance Company, as per the information available with them, the Insured, at the time of his death, was a known case of Diabetes for the last 10 years and was under Insulin.  The Insured was also an Alcoholic for more than 5 years and had undergone medical treatment for the same at Silver Oaks Hospital 2 years back, but these material facts were not disclosed by the deceased in the proposal form and, therefore, the Insurance Company was not liable to pay the assured amount under the said policy.

4.       Alleging deficiency of service and unfair trade practice on the part of the Insurance Company, the Respondent filed a complaint before the District Forum, praying for directions to the Insurance Company to pay to her :

(i)      Rs.4,95,000/-, being the sum assured under the life insurance policy in question;

(ii)     Rs.2,00,000/- as punitive damages;

(iii)    Rs.2,00,000/- as compensation/expenses for mental agony, torture, harassment etc.;

(iv)    Rs.30,000/- as legal costs & expenses;

(v)     Rs.2,85,000/- as expenses incurred and charged by the Silver Oaks Hospital on the treatment of the deceased Insured; and

(vi)    Rs.2,31,364/- as expenses incurred on medicines purchased.

5.       Upon consideration of the evidence adduced by both the parties, the District Forum observed that the Annexure-F, the Diabetes questionnaire, in which it was mentioned that the Insured was diagnosed to be suffering with Diabetes for the last 10 years, on the basis of which it was alleged by the Insurance Company that the Insured had concealed the said material information at the time of taking the policy in question, could not be relied upon, as the Doctor, who had prepared the said Annexure, was not examined nor his affidavit had been placed on file.  On the question whether there was any nexus between the Diabetes and the cardiac arrest/heart attack, the District Forum, relying on the decision of the Punjab State Consumer Disputes Redressal Commission in Life Insurance Corporation of India Vs. Satinder Kaur, III (2008) CPJ 279, held that there was no evidence to indicate that the Insured was ever suffering from Diabetes Mellitus prior to the taking of the life insurance policy in question.  The District Forum came to the conclusion that the Insurance Company had wrongly repudiated the claim of the Respondent/Complainant, which was otherwise to be allowed. The District Forum, thus, allowed the complaint and awarded the aforesaid amounts. 

6.       Being aggrieved, the Insurance Company preferred Appeal before the State Commission. On a re-appraisal of the entire material on record, including the Alcohol questionnaire submitted by the Insurance Company, wherein it was stated that the death may not be due to alcoholism per se, the State Commission observed that the Insured had died due to heart attack and no material worth the name had been made available to point out that heart attack had any link with the consumption of alcoholic beverages.  The State Commission held that the claim of the Respondent/Complainant could not be repudiated on the ground that the Insured had concealed the factum of his disease or consuming liquor and, thus, dismissed the Appeal in limine.  Hence, the present Revision Petition.

7.       The question for consideration is as to whether or not there was suppression of any “material fact” by the Insured, having material bearing on the repudiation of the claim by the Insurance Company under the life insurance policy?

8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their 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, which is based on the principle of utmost faith – uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.

9.       Bearing in mind the afore-noted principle, governing a contract of insurance, we advert to the facts at hand.  The relevant questions in the proposal form (page-34 of the paper-book), on which strong reliance is placed by the Insurance Company, and, which were required to be replied by the Insured, were:

“2B.             Have you ever had any medical treatment, including investigations, tests, scans or X-Ray for any of the following illnesses or medical conditions:

                   XXX    XXX    XXX

iv.       Diabetes, kidney or liver problem?

D.      Alcohol

          (i)      Do you take or have you ever taken alcohol?

(ii)     Have you every sought or been given medical advice to reduce/abstain from drinking?”

10.     Admittedly, these questions were answered in the negative by the Insured.  Undoubtedly, these were “material facts” and being within the knowledge of the Insured only, he was obliged to disclose the same correctly in the proposal form issued to him for the purpose of obtaining the life insurance policy in question.  Even if, for the sake of argument as advanced by learned counsel for the Respondent/Complainant, it is assumed that there was no nexus between the death of the Insured and diabetes/alcoholism, it is manifest from the Alcohol and Diabetes Questionnaires (pages 52-57 of the paper-book), which were required to be filled up by the Claimant in consultation with the Consulting Physician and which had been filled up and signed by the Claimant, Respondent/Complainant, in consultation with the Consulting Physician, that the Insured was suffering with Alcoholism for the last more than 5 years and with Diabetes for the last 10 years.  In such a scenario, even if the consulting physicians were not examined nor were affidavits filed by them to prove the above questionnaires, the fact remains that the said questionnaires had been filled up and signed by the Respondent/Complainant in English in consultation with the consulting physician.  There was no rebuttal to the said questionnaires by the Respondent/Complainant and also it was not her case that she did not understand English language and had simply signed the said questionnaires at the behest of the Consulting Physician. In that view of the matter, the observation of the District Forum that it is not understood whether the questionnaire was answered by the doctor and thereafter the signatures of the complainant were obtained or vice versa, becomes meaningless.  Insofar as the contention of the Respondent/Complainant that incomplete proposal form had been placed on file before the District Forum, we find that no such plea had been taken by the Complainant before the Fora below.

11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health/habits of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaires was material for the purpose of the life insurance policy.  At any rate, the statements made in the proposal form were untrue and incorrect.  We are, therefore, of the opinion that the Insurance Company was justified in repudiating the claim of the Respondent/Complainant.

12.     Resultantly, the Revision Petition is allowed and the orders of the Fora below are set aside.  No costs.