Delhi

New Delhi

CC/1286/2010

Rajender Kumar Kholi - Complainant(s)

Versus

M/S. Reliance Life Insurance Company Ltd. - Opp.Party(s)

15 Jan 2020

ORDER

 

                                CONSUMER DISPUTES REDRESSAL FORUM-VI

                              (DISTT. NEW DELHI),

                          ‘M’ BLOCK, 1^STFLOOR, VIKAS BHAWAN, I.P.ESTATE,

                                                            NEW DELHI-110001

 

              Case No.C.C.1286/2010                                        Dated:

               In the matter of:

Sh. Rajinder Kumar Kohli,

S/o Sh. Krishan Lal Kohli,

R/o D-195, IInd Floor,

Saket, New Delhi-110017.

 

                 ……..COMPLAINANT

VERSUS

             Manager,

             Reliance  Life  Insurance  Co. Ltd.

            801-805, 8^th Floor,

            Narain Manzil,

            23, Barakhamba Road,

             New Delhi-01.

Opposite Party.

                

NIPUR CHANDNA, MEMBER

ORDER

       

The complainant has filed the present complaint against the OP under section 12 of Consumer Protection Act, 1986.  The gist of the complaint is that the complainant had taken 7 policies within a period between November 2007 till January, 2008 for himself and his family members from the OP Co.  Unfortunately, wife of complainant namely Mrs. Mickey Kohli expired on 3.3.2009 and the present complaint pertains to her claim vide policy  no.11133398, which covered the  death benefit and the complainant paid Rs.1.5 lacs as a premium for this policy.  Therefore, the complainant was  entitled for a sum of Rs.3.75 lacs, but only Rs.1,12,997.79 has been paid to him by the OP Co.  After few days, two person of OP Co. came to the house of complainant, to enquire about the cause of death of his wife, on inquiry, the complainant intimated them about the  medical history of his wife to the effect that she had undergone chronic cholecystitis(gall bladder operation in year 2007. 

2.     Thereafter, on 30.4.2009, complainant received a letter from the Chennai Branch of OP Co. in which he was informed that he is not entitled to the insurance claim for a sum of Rs.3.75 lacs due to the non disclosure of the said operation of gall bladder under the provisions of Insurance Act. 1938.  On the continuous persuasion by the complainant, finally under the pretext of goodwill gesture, the OP Co. released a sum of Rs.1,12,997.97 against the total claim of Rs.3.75 lacs arbitrarily, the complainant accepted the same  without prejudice to his right and the endorsement regarding the same was given on the discharge voucher signed by the complainant.  The arbitrary settlement claim of the complainant lead to the deficiency in services on its part, hence this complaint.

3.     OP had filed written statement opposing complaint of the complainant. It was alleged that Life Assured had undergone chronic cholecystitis(gall bladder operation in year2007.  It was alleged that the Life Assured had given false replies in the application for insurance  as such the policy was obtained by concealment and suppression of material facts. It was alleged that the claim was rightly settled as the policy was obtained by concealment and suppression of material facts.

4.     Both the parties filed evidence by way of affidavit. Parties also filed written arguments.

5.     Ld. counsel for the OP has contended that  Life Assured had undergone chronic cholecystitis(gall bladder operation in year 2007.  It was alleged that the Life Assured had given false replies in the application for insurance as such the policy was obtained by concealment and suppression of material facts. In support of its contention counsel for OP has drawn our attention towards the proposal form as well as the copies of death summary of Max Devki  Devi Heart & Vascular Institute. It was further argued that the claim was rightly settled as the policy was obtained by concealment and suppression of material facts.

6.     On the other hand, ld. counsel for the complainant has contended that there is no concealment of material facts by the Life Assured, and prayed that the relief claims be granted.

7.     It is admitted position that the Life Assured had taken insurance policy, wherein total sum assured was Rs.3.75 lacs from the OP on 22.11.2007. The Life Assured had died on 3.3.2009. Claim has been partly settled by the OP on the ground that the Life Assured has undergone cholecystectomy  in the year 2007.  It was alleged the Life Assured had given false replies in the application for insurance as such the policy was obtained by concealment and suppression of material facts.

8.     To prove the aforesaid stand, OP has relied upon the queries answered by the Life Assured in the proposal form. The relevant portion of the same is reproduced as under: ,

31)   Is any surgery planned or are your currently aware that you                                         may need to sick medical advice within the near future.                                                               No   

9.     OP has relied upon documents collected during the investigation of the claim by it. There is death summary of Life Assured issued by Max Devki  Devi Heart & Vascular Institute showing that Life Assured had undergone cholecystectomy  in the year 2007.  The material on record clearly shows that the Life Assured had not given correct answers and had obtained the policy by suppressing material facts.

10.    Clause „Validity and Non-Disclosure” of the terms and condition of insurance renders the policy void if the statement and declaration made are found untrue. The relevant clause of policy is reproduced as under: “This policy is issued in utmost good faith based on the declaration and statements made by you and we cannot be held responsible in any manner for any action taken by us based on these declarations and statements. You and the Life Assured under this policy have an obligation to disclose every fact material to our assessment of the risk of issuing this policy. Failure to disclose or misrepresentation of a material fact will allow us to deny the claim.

11.    The contracts of insurance are contracts of uberrima fides and every material fact is required to be disclosed. In United India Page 11 of 13 Insurance Co. Ltd. v. M.K.J. Corpn., III (1996) CPJ 8 (SC), a two Judge Bench of Hon‟ble Supreme Court has observed: “It is a fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, „similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured‟.”

12.    In Satwant Kaur Sandhu v New India Assurance Company reported in IV (2009) CPJ 8 (SC), Hon‟ble Supreme Court has observed that in a contract of insurance, the expression “material fact” is to be understood in general terms, to mean as any fact which would influence the mind 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 its 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– uberrimae fidei. 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 Page 12 of 13 fact and his believing the contrary. 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.

13.    In PC Chacko and Anr. v. Chairman, Life Insurance Corporation of India & Ors. (2008) 1 SCC 321, the Hon‟ble Supreme Court has upheld the repudiation of the contract of insurance on the ground of non-disclosure and mis-statement in the proposal form to the various questions to which the answers were given by the insured.

14.    In the present case, the material on record discussed above clearly establishes that the Life Assured had concealed material facts about his health in the proposal. The Life Assured had failed to disclose that she had undergone cholecystectomy  in the year 2007 prior to the issuance of the policy in question. Further, when the application for insurance was filled up by Life Assured and she had replied questions in respect of aforesaid ailments in negative. There is clear suppression of material facts in relation to diseases suffered by him prior to date of application for insurance. Even in Medical Examination’s Report, the Life Assured had replied in negative to the questions about his past medical history. Material on record shows that policy was obtained by concealment of material facts. In the facts and circumstances of the present case, the OP was justified in settling the present claim.

15.    In view of the above discussion, we find not merits in the present compliant, same is hereby dismissed.

A copy of this order each be sent to both the parties free of cost by post. This final order be sent to server (www.confonet.nic.in ). File be consigned to Record Room.

Announced in open Forum on 15/01/2020. 

 

 

(ARUN KUMAR ARYA)

          PRESIDENT

 

(NIPUR CHANDNA)                                                  (H M VYAS)

       MEMBER                                                                MEMBER