1.      The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 25.07.2022 passed by the State Consumer Disputes Redressal Commission, A.P., Vijayawada (“the State Commission”), in CC No. 1 of 2020 wherein the State Commission dismissed the Complaint.

2.      For Convenience, the parties in the present matter being referred to as mentioned in the Complaint before the State Commission. “Isnaka Devasenamma” is identified as the Complainant (Appellant herein) is the wife and nominee of Venku Reddy (Deceased Life Assured- DLA). Meanwhile, "M/s. Max Life Insurance Company Limited" is referred to as the Opposite Parties No.1&2/Respondents No.1&2/Insurer and Axis Bank Ltd is referred to as the Opposite Party No.3/Respondent No.3.

3.      Brief facts of the case, as per the Complainant, are that the OP-1 Max Life Insurance Company Ltd and its 2nd Branch Office/OP-2 issued a life insurance policy to Venku Reddy, referred to as the life assured, under Policy No. 35003246, for Rs.45,00,000/- as sum assured. The OP-3 bank, sanctioned a loan of Rs.45,00,000/- to the life assured with an interest rate of 10.5%. The life assured was required to pay Rs. 69,480/- per month for 8 years. OP-3, as the agent of OP-1, facilitated the insurance policy. The policy certificate was issued on 13.02.2019. The life assured passed away on 28.02.2019 while undergoing treatment at Basavatarakam Indo-American Cancer Hospital and Research Institute, Hyderabad. The complainant, being the nominee, submitted a claim to the insurance company, which was repudiated on 15.05.2019, citing non-disclosure of the life assured's diagnosis of Non-Hodgkin Lymphoma. She requested reconsideration, but the claim was again rejected on 11.06.2019. She asserted that there was no prior knowledge or intentional non-disclosure of the illness by the life assured before submitting the insurance application and that the repudiation constitutes a deficiency in service.  Being aggrieved, she filed a consumer complaint before the State Commission seeking payment of the sum assured of Rs. 45,00,000/- with interest and costs.

4.      In their reply before the State Commission, OP-1 & 2  denied the allegations and contended that the life assured obtained the policy on payment of a single premium of Rs. 78,747/-. They refuted the claim that OP-3 induced the life assured to obtain the policy. They confirmed that the claim was repudiated due to the non-disclosure of material facts, specifically the life assured's prior diagnosis of Non-Hodgkin Lymphoma as evidenced by medical records from Apollo Specialty Hospital, Chennai. The insurer refunded the premium to the Axis Bank account of the policyholder. They contended that there is no deficiency in service as the claim was repudiated per the policy terms.

5.      In its reply before the State Commission, OP-3 denied the allegations and asserted that there is no privity of contract between the complainant and the bank regarding the insurance policy. The bank facilitated a loan against house property and had no role in the repudiation of the insurance claim by the insurance company. The bank contended that it was wrongly dragged into the proceedings without any cause of action and sought dismissal of the complaint against it.

6.  The State Commission vide order dated 25.07.2022 dismissed the complaint with the following findings /reasons:

“9) The entire controversy revolves around whether the life assured intentionally and willfully suppressed his health condition in Ex.B-1/A-12, Health Declaration Form by giving negative answers so far as the clauses relating to his health condition. A perusal of Ex.B-1 gives an impression to an ordinary prudent man that the life assured was not suffering from any ailment of any nature as on 25.01.2019. The burden of proof lies on the opposite parties to establish that the life assured is very much aware that he is suffering from cancer as on 25.01.2019. If the opposite parties 1 and 2 fails to establish this aspect, certainly it is not justified in repudiating the claim of the complainant. It is a matter of common knowledge that an individual may know if there is any change in the functioning of any organ of the body. A person, who is not comfortable with his health condition, may experience some sort of pain or inconvenience even though he may not know the exact ailment with which he is suffering. The fact remains, that such person is very much aware of disorder in the functioning of his organ system. As per the averments made in the complaint, the life assured complained of restlessness and other problems in the month of December, 2018 while distributing wedding cards of his daughter. Ex A-7 is the medical certificate issued by KIMS, Nellore on 07.12.2018. As per the averments made in the complaint, the life assured underwent tests in S.S. Diagnostics as directed by Dr. P. Vijaya Kumar. A perusal of Ex A-8, Hematology report, dated 14.02.2019, clearly reveals that Hemoglobin (Hb) of the life assured is 5.8 gms/dl. After verifying the medical reports, Dr. P,Vijaya Kumar, Vijaya Care Hospital, Nellore, issued Ex.A-9, letter, dated 14.02.2019, directing the life assured to consult 'Oncologist'. The recitals of Ex.A-9 clearly reveals that Dr. P. Vijaya Kumar came to a conclusion basing on the reports that the life assured is not maintaining good health from December, 2018 onwards. The relevant portion of Ex.A-10, discharge summary issued by Basavatarakam Indo-American Cancer Hospital and Research Institute, Hyderabad is extracted hereunder:

"Brief History of the patient:

A 62 year old, non diabetic, non hypertensive, gentleman, presented with c/o. FEVER and jaundice since 1 month. He was evaluated at Nellore where he was diagnosed to mantle cell lymphoma and had come here for further management"".

A perusal of Ex A-10 clinchingly establishes that the life assured was admitted in Basavatarakam Indo-American Cancer Hospital and Research Institute on 17.02.2019 and discharged on 23.02.2019 after taking treatment for cancer. A perusal of Ex A-11, death summary issued by Basavatarakam Indo-American Cancer Hospital and Research Institute, clearly reveals that the life assured was admitted on 27.02.2019 and died on 28.02.2019 while undergoing treatment. In ExA-11, it is clearly mentioned that "Venku Reddy, known Hypertensive & Diabetic, known case of Mantle Cell Lymphoma Stage IV, presented with Hypotension" Ex.A-12 in the death certificate issued by Basavatarakarn Indo-American Cancer Hospital and Research Institute, Hyderabad.

10) The learned counsel for the complainant placed much reliance on these two documents to convince this Commission that the life assured is not aware that he is suffering from cancer as on 25.01.2019. As rightly pointed out by the learned counsel for the complainant that Exs.A-8 to A-11 medical records are subsequent to 25.01.2019.

11) The opposite parties 1 and 2 have taken a specific stand in the written version that the life assured had undergone treatment in Apollo Specialty Hospital, Chennai prior to submission of Ex.B-1, Health Declaration Form. The complainant did not choose to file rejoinder specifically denying that the life assured at no point of time taken treatment in Apollo Specialty Hospital, Chennai. Non-filing of rejoinder on this particular aspect cast a cloud on the version put forth by the complainant. The complaint is conspicuously silent with regard to taking of the treatment by the life assured at any point of time, more particularly just prior to submitting of Ex.B-1, Health Declaration Form, to opposite parties. To substantiate the stand, the opposite parties 1 and 2 placed much reliance on Ex. B-5, bunch of medical reports of the life assured. We have carefully scanned each page of the medical report issued by Apollo Specialty Hospital, Chennai, in order to ascertain whether the life assured knows that he is suffering from cancer or not as on 25.01.2019. A perusal of Apollo hospital medical record clinchingly establishes that the life assured underwent number of tests including blood samples on 12.01.2019. A perusal of the record clearly reveals that the blood reports of the life assured were received on 14.01.2019. On 12.01.2019 itself, the life assured was diagnosed with "Chronic Lymphoproliferative disorder. A perusal of this record further reveals that the life assured had taken treatment in Apollo Hospital, Chennai from 16.01.2019 to 22.01.2019 with "UHID No. AC010003077912. In all these reports, reference doctor name is shown as Dr. Jose Measow. The life assured once again joined in Apollo Hospital, Chennai on 07.02.2019 and discharged on 08.02.2019 with UHID No. AC010003077912. The patient identified is mentioned as 'CSNIP75842'. A perusal of the medical record further reveals that the life assured had taken necessary treatment in Third Floor, 3rd B Ward, Bed No. 1326 of Apollo Hospital, Chennai. Even as per the medical reports, dated 16.01.2019 that the life assured is a known case of 'Mantle Cell Lymphoma'. A perusal of Ex.B-5 clearly reveals that the life assured has taken treatment in Apollo Hospital, Chennai from 12.01.2019 to 22.01.2019. A perusal of Ex.B-4 clearly reveals that the Investigator collected necessary documents from Apollo Hospital, Chennai. By any stretch of imagination it cannot be presumed that the life assured came to know, for the first time, on 17.02.2019 that he is suffering from cancer. Basing on Ex.B-5, the irresistible conclusion that can be drawn is that the life assured is very much aware that he is suffering from cancer from 12.01.2019. Knowing fully well that the life assured is suffering from cancer, intentionally and willfully did not disclose the said fact in Ex.B-1, Health Declaration Form. Suppression of such information is nothing short of suppression of the material information. Had the life assured disclosed correct information with regard to his health condition, there is an opportunity to the opposite parties 1 and 2 either to accept or reject the proposal of the life assured. Obtaining of the policy by suppressing material information enables the insurer to repudiate the claim. The opposite parties 1 and 2 repudiated the claim of the complainant on the ground that the life assured suppressed the pre-existing disease.

12)      The complainant has taken a specific plea in the complaint that the opposite parties land 2 without any dispute settled the claim in respect of Policy No. 205995798. The record reveals that the life assured has taken this policy in the year 2014, therefore, the opposite parties 1 and 2 settled the claim. The policy in question was taken by the life assured on 12.02.2019. As per the medical record, the life assured has taken treatment in Apollo Specialty Hospital, Chennai on 12.01.2019. Settlement of previous policy by the opposite parties 1 and 2 clearly reveals that they are settling the claims as per the terms and conditions of the policy. It is needless to say, the Insurance Company has to settle each claim basing on the information secured by it.

13) The opposite parties 1 and 2 are perfectly justified in repudiating the claim of the complainant. Viewed from any angle, the act of the opposite parties 1 and 2 in repudiating the claim of the complainant will fall outside the purview of deficiency in service as contemplated under Section 2(1)(g) of the Act. Hence, this point is answered in favour of the opposite parties and against the complainant.

14)      POINTS 2 & 3:-

 In view of our finding on Point No.1, the complainant is not entitled to claim the sum assured under the policy. Thus, there is no necessity to discuss these points elaborately. Hence, these two points are answered accordingly.

15) In the result, the complaint is dismissed. No costs.”

7.      Being aggrieved by the order of the State Commission, the Complainant/Appellant filed Appeal no. 664 of 2022 seeking:

a) Set aside the impugned judgment and final order dated 25.07.2022 passed by the Hon'ble Andhra Pradesh State Consumer Disputes Redressal Commission at Vijaywada in CC No.1 of 2020 and allow the prayers made by the appellant in CC No. 1 of 2020 before Hon'ble Andhra Pradesh State Consumer Disputes Redressal Commission at Vijaywada; and

b) pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case.

8.      In the Appeal, the Appellant mainly raised the following issues:

1. The State Commission failed to properly consider that the insurance company had settled the claim of the appellant in another insurance policy i.e. Policy No. 205995798 vide letter dated 19.03.2019 with respect to death of Isanaka Venku Reddy. Hence, it is very clear that the husband of the appellant had not withheld any relevant information from the respondents herein with respect to his health and therefore the 1st and 2nd respondents had cleared the claim with respect to Policy No.205995798 vide letter dated 19.03.2019.
2. The State Commission failed to properly consider that Dr. Vijaya Kumar of Vijaya Care Hospital had clearly stated in his referral letter dated 14.02.2019 that the life insured was suffering from anaemia and general weakness since only last two days. Hence, it is very clear that the husband of the appellant came to know about the possibility of the disease only on 14.02.2019 at best and anaemia symptom was also there only for two days before Dr. Vijaya Kumar had checked the husband of the appellant.
3. The State Commission failed to consider that discharge summary dated 23.02.2019 of Basavatarakam, Indo-American Cancer Hospital clearly states that her husband was discharged in a stable condition. Therefore, it is clear that her husband was stable even as on 23.02.2019 and liable to get the insurance claim.
4. The State Commission failed to properly consider that her husband was not aware of his disease prior to 14.02.2019 as Dr. Vijay Kumar had referred him to an oncologist only on 14.02.2019 after the result dated 14.02.2019 of SS Diagnostics showed less haemoglobin count. He approached the Basavatarakam Indo-American Cancer Hospital thereafter. Hence, the impugned order of the state commission is liable to be set aside.
5. The State Commission failed to consider that failure of the appellant herein to file a rejoinder by itself does not negate the claim of the appellant herein. The State Commission ought not to have dismissed the claim of the appellant since no rejoinder was filed against the claim of treatment at Apollo Hospitals, Chennai. It is for OP-1 and 2 to prove its claim of treatment at Apollo Hospitals.
6. The 1 and 2^nd Respondents made a false claim before the State Commission that the 3^rd Respondent is not its agent or intermediary while it is clear from the insurance policy document and from the written version of the 3^rd Respondent herein that the 3rd Respondent is the agent/intermediary of the 1st and 2nd Respondents herein. The husband of the appellant took the policy only because the 3rd respondent herein had induced the husband of the Appellant to take the same so as to approve the loan.

9.      In his arguments, the learned counsel for the Appellant reiterated the complaint and grounds of appeal, stating that the deceased required financial assistance to conduct his daughter's wedding. Accordingly, he availed the Max Life Group Credit Life Secure Policy for a sum of Rs.45,00,000/- under Policy No. 35003246 after making a payment of Rs.78,747/-. He highlighted the policy documents from Respondent No.1, which state: "Completion of this form does not mean automatic commencement of insurance coverage. This is only an Application cum Declaration of Good Health form. You may be required to undergo a medical examination if the need arises and the coverage is not effective while this application is under process. Insurance cover shall commence only after satisfactory completion of medical & financial underwriting conducted by Max Life Insurance Co. Ltd and subsequent written confirmation by Max Life Insurance Co Ltd conveying the commencement of insurance coverage and issuing a Certificate of Insurance."  The counsel contended that Respondent No.1 had a duty to verify all information provided by the deceased in the application for the insurance policy, including ensuring the completion of necessary medical and financial underwriting. There was no suppression of information. Prior to obtaining the policy, the deceased underwent a health check-up at Krishna Institute of Medical Science, Nellore, on 07.12.2018, and the report indicated that his vitals were completely normal. Any medical outcome after being admitted to Apollo Specialty Hospital could not be placed before Respondent No.1, as the Apollo Hospital medical report was printed only on 28.01.2019 and could not be furnished on 25.01.2019 (the date on which the policy papers were signed and submitted to Respondent No.1). After being fully satisfied, Respondent No.1 issued the requisite policy No. 35003246 under the Max Life Group Credit Life Secure Plan to the deceased on 13.02.2019. The policy document clearly stated that the loan and the sum assured were Rs. 45,00,000/-.  The policy letter stated Respondent No.3 was an agent/intermediary of Respondent No.1 and 2, and the appellant was the nominee. The life assured passed away on 28.02.2019 while undergoing treatment at Basavatarakam Indo-American Cancer Hospital, with the cause of death being Mantle Cell Lymphoma septic shock. He noted that Respondent No.1, on 19.03.2019, without hesitation transferred Rs. 4,60,490.18/- to the appellant, settling another death claim under policy No. 205995798 without objection. However, when the appellant intimated the death claim of policy No. 35003246, Respondent No.1, vide letter dated 15.05.2019, on erroneous grounds, refused to issue the claim, asserting that the life insured, Isanaku Venku Reddy, was diagnosed with Non-Hodgkin Lymphoma before signing the death claim on 25.01.2019, which was not disclosed to Respondent No.1.  Aggrieved by the refusal, she requested reconsideration of the death claim. However, the Chief Manager, Claims Max Life Insurance Company Limited, vide letter dated 11.06.2019, stated that the proposal was reconsidered but declined. Again, on 01.07.2019, the appellant received another letter from the Senior Manager, Claims, Max Life Insurance Company Limited, reiterating the contents of the letter dated 11.06.2019.  Aggrieved by the rejection, she preferred CC No. 1 of 2019. Despite medical report being handed over to the deceased after submitting the policy papers, the Commission refused to grant any relief to the appellant and dismissed the complaint without proper application of mind.  The appellant sought to set aside the impugned order passed by the State Commission and grant the sum assured under policy No. 35003246 amounting to Rs. 45,00,000/- with interest and costs due to the alleged deficiency in service by Respondent No.1 in not properly verifying the deceased's health condition during the application process. The appellant relied upon the judgment of the Hon’ble Supreme Court in Manmohan Nanda Vs. United India Assurance Company Limited and Another, (2022) 4 SCC 582.

10.    On the other hand, the counsel for Respondents No.1 & 2/OP-1 & 2 Insurer asserted that the DLA had provided false information and concealed his pre-existing medical condition while applying for the policies. The DLA had a history of Non-Hodgkin Lymphoma since 18.01.2009, which was documented in the treatment at Apollo Specialty Hospital, whereas the insured signed the proposal on 25.01.2019. Based on this, the OP justified repudiating the claim on 15.05.2019. The counsel further contended that the claim allowed under policy No. 205995798 was issued on 26.03.2014, and the claim made for payment was in terms of that policy. In contrast, policy No. 35003246, the subject matter of the present case, was issued on 13.02.2019. These are two different and independent policies with no link to each other, issued under different terms and conditions. The State Commission's order is appropriate, and the appeal should be dismissed. The learned counsel relied on Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbai Rathod, (2019) 6 SCC 175 ; and Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848.

11.    I have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by learned Counsels for both parties.

12. The primary issue in this case revolves around the repudiation of the insurance claim by the Respondent Insurer based on the alleged concealment of pre-existing medical conditions of the DLA. The key question is whether the insured/Complainant provided false information or concealed material facts regarding the health condition of the DLA while applying for the insurance policies?

13.    Undisputedly, the DLA had taken the treatment in Apollo Specialty Hospital, Chennai on 18.01.2019 wherein he underwent number of tests including blood samples and was known case of “Non Hodgkin Lymphoma” and he was diagnosed as cancer on 18.01.2019 whereas the proposal form was signed on 25.01.2019.  The policy was issued on 13.02.2019.  The insured died on 28.02.2019 with the reason of Mantle Cell Lymphoma Septic Shock, Febrile Neutropenia, Hepatic Encephalopathy, Mantle Cell Lymphoma which is evidenced from the date summary issued by Basavatarakam Indo-American Cancer Hospital & Research Institute, Hyderabad. 

14.    The learned Counsel for the Appellant has relied upon the judgment of the Hon’ble Supreme Court in the case of Manmohan Nanda (Supra).  The said case does not help the Appellant because the facts of the said case are not fully applicable to the present case.

15.    In view of the foregoing, I am of the considered view that the DLA/ Complainant failed to disclose his medical conditions while obtaining the said Insurance Policies. In this regard Hon’ble Supreme Court in Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848 decided on 09.10.2020 lays down that:

 “A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk.”

16.    Similar view was taken by the Hon’ble Supreme Court in Reliance Life Insurance Co. Ltd. v. Rekhaben Nareshbhai Rathod, (2019) 6 SCC 175 decided on 24.11.2019 wherein it was held that suppression of the facts made in proposal form will render an Insurance Policy voidable by the Insurer.

17.  In view of the aforesaid discussion above, as well as the principles laid down by the Hon’ble Supreme Court supra, I do not find any illegality or infirmity in Order passed by the learned State Commission dated 25.07.2022. Therefore, the Appeal filed by the Complainant is dismissed. The Order passed by the State Commission is upheld.

18.    There shall be no order as to costs. All pending application, if any, also stand disposed of accordingly.

19.    The Registry is directed to release the Statutory deposit amount, if any in favour of the Appellant.