1.      This Revision Petition is filed under Section 58(1)(b) of the Consumer Protection Act, 2019 (the “Act”) against impugned order dated 29.10.2022 passed by the Uttarakhand State Consumer Disputes Redressal Commission, Dehradun, (‘the State Commission’) in FA No. 102/2019 wherein the State Commission allowed the Appeal filed by the Respondent/OP against order dated 14.12.2019 passed by the District Consumer Disputes Redressal Forum, Haridwar, (‘the District Forum’) which allowed the complaint.

2.      As per the office report, there is 3 days delay in filing this Revision Petition.  For the reasons stated in I.A. No.1409 of 2023, the delay is condoned.

3.      For convenience, the parties are referred to as placed in the original Complaint filed before the District Forum.

4.      Brief facts of the case, as per the Complainant, are that he purchased a Family Health Optima Insurance Policy No. P/161311/ 01/2014/000328 on payment of prescribed premium having validity from 30.07.2013 to 29.07.2014 under which Complainant himself, his wife, two sons and one daughter were covered for Rs. 4 Lakhs each. During existence of the policy, the Complainant fell ill and went for his treatment at IVY Hospital, Mohali on 13.08.2013, where he learnt for the first time after his medical check-up that he was afflicted with chronic kidney disease V on MHD and he was advised for kidney transplantation. He was admitted to the same hospital on 26.02.2014 from where he was discharged on 08.03.2014 after kidney transplant. It is further alleged that the complainant has incurred the expenses of Rs.4,46,193/-in his treatment and he has applied cashless treatment on 18.02.2014 furnishing the requisite documents, but the OP repudiated his claim on wrong basis against which the complaint case was filed before the District Forum by the complainant.

5.      In reply, the OP contended that the Complainant has not disclosed his chronic kidney disease at the time of filling proposal form / purchase of first policy w.e.f. 30.07.2012 to 29.07.2013, which amounts to misrepresentation/non-disclosure of material facts at the time of purchase of the policy. Thus, the Complainant violated policy Condition No. 7. Hence, the repudiation order was properly passed by the company and the complainant is not entitled to any claim.

6.      The learned District Forum vide Order dated 14.12.2019 allowed the complaint and granted the following relief:-

“The complaint is admitted. The Opposite Party/ Insurance Company is directed that he shall be ensured to be paid an amount of Rs.4,00,000/- with 06% interest per annum within a month from the date of this order, and the amount of Rs.20,000/- as damages and litigation expenses shall also be ensured to be paid to the complainant from the date of institution of the case till the final payment.”

(Extracted from translated copy)

7.      Being aggrieved by the Order of the learned District Forum, the OP filed First Appeal No.102 of 2019 and the State Commission vide order dated 29.10.2022 allowed the Appeal and dismissed the complaint filed by the Complainant with the following observations:

“8. We have also heard both the sides in the appeal and perused the record.

9. The question of consideration before us is whether there was any concealment and misrepresentation of the material fact of pre-existing disease on the part of the complainant or not.

10. It is an admitted fact that the respondent-complainant has purchased a LIC insurance policy bearing policy No. P/ 161311/01/2014/000328 after paying the prescribed premium to the insurance company - appellant (in short insurance company) which was valid for the period commencing from 30.07.2013 to 29.07.2014. It is also not disputed that in the said insurance policy, the complainant Sh. Sanjeev Grover, his wife, his two sons and one daughter, each was covered for Rs. Four Lacs during the existence of the policy period. It is not disputed by the insurer that the complainant was advised for kidney transplant. It is also admitted as per the medical evidence/medical record of the Hospital IVY Mohali, that the complainant was admitted to the same Hospital on 26.02.2014 from where he was discharged on 08.03.2014 after Kidney Transplant. There is no dispute between the parties to the appeal that in the entire Kidney Transplant process, the complainant had to incur Rs. 4,46,193/- in his treatment, whereas the insurance policy is to the limit of Rs.Four lacs.

11. Now the dispute between the parties is about whether there was any violation of the condition No. 7 of the insurance policy in question or not.

12. The repudiation letter (paper No. 83), wherein it is specifically mentioned as under:-

"It is observed from the medical records, the insured patient is suffering from chronic kidney disease stage V and stage renal disease and is on maintenance haemo dialysis. As per indoor case record of the above hospital dated 20.2.2014, the insured patient has chronic kidney disease for the past 4 years which is prior to inception of medical history/health details of the insured - person which amounts to misrepresentation / non-disclosure of material facts. As per Condition No. 7 of the policy issued to you, if there is any misrepresentation / non-disclosure of material facts whether by the insured person or any other person acting on his behalf, the company is not liable to make any payment in respect of any claim. We are therefore, unable to settle your claim under the above policy and we hereby repudiate your claim. As per condition No. 12, the policy is also liable to be cancelled and necessary action will be taken by our Corporate office."

13. Thus, as per the repudiation letter, the complainant's claim by the insurer was repudiated on the ground that from the time of inception of the first policy, the insured has not disclosed the medical history / health detail about his pre-existing disease to the insurer and such act amounts to misrepresentation, nondisclosure of the material fact. Thereby as per this condition, the complainant's claim was repudiated.

14. We have also gone through the terms and conditions of the policy, wherein under column of exclusion clause (paper No. 46 of the appeal file) the condition No. 7 is mentioned as under:-

"(i) The company shall not be liable to make any payments under this policy in respect of any expenses whatsoever incurred by the insured person in connection with or in respect of (i) pre-existing disease is as defined in the policy until 48 consecutive months of continuous coverage has elapsed, since inception of the first policy with an Indian Insurer. However, the limit of the Company's liability in respect of claim for Preexisting Diseases under such Portability shall be limited to the Sum Insured under first policy with any Indian Insurance Company."

  As per condition No. 7 of the insurance policy (paper No. 47 of the appeal file) it is also provided as follows:-

"7. The Company shall not be liable to make any payment under the policy in respect of any claim if such claim is in any manner fraudulent or supported by any fraudulent means or device, misrepresentation / non-disclosure whether by the Insured Person/s or by any other person acting his behalf."

15. We have also perused the Medical History (paper No. 66) and duration: Health condition of the patient, wherein the information was collected from patient / attender or hospital records. As per the above document/ evidence (paper No. 66) the complainant was alleged to have suffered from the chronic kidney disease since last four years and this document was written down on 28.02.2014. Likewise in the OPD patient record (paper No. 70 dated 20.02.2014), the concerned doctor has also specifically written that at the time of treatment, the patient was suffering from chronic kidney disease, V stage since last four years.

16. It is also admitted fact as per the pleadings of the complaint as well as documentary evidence filed in the record (paper Nos. 36 to 43) that the first premium policy No. P/161311/01/2013/000332 was taken on 30.07.2012 for the period w.e.f. 30.07.2012 to 29.07.2013 thereafter the insurance policy P/161311/01/2014/000328 was taken by the complainant on 06.07.2013 having validity from 30.07.2013 to 29.07.2014 and policy No. P/161311/01/2015/000932 was taken by the complainant on 11.09.2014 with validity from 30.07.2014 to 29.07.2015 and thus a perusal of all these policies has proved this fact that date of the inception of the first policy was as 30.07.2012. As per the documentary medical evidence (paper No. 66) dated 28.02.2014 and paper No. 70 dated 20.02.2014, the complainant was suffering from chronic kidney disease since last four years thereby it is meant that the complainant was a patient of chronic kidney disease before the date of inception of the first policy, i.e. before dated 30.07.2012 and if we count four years from the date of 20.02.2014, then it comes as 25.02.2010, and from that period, the complaint was suffering from chronic kidney disease and this fact was hidden / concealed from the insurance company. Hence, there was a misrepresentation and the concealment of the material facts of the pre-existing disease on the part of the complainant, which amounts to the violation of the terms and conditions of the insurance policy which are contained in the exclusion clause as well as condition No. 7 of the insurance policy. Thus, we are of the opinion that the District Commission has erred in considering the terms and conditions of the insurance policy, which were an integral part of the contract of the insurance policy and has wrongly held that the complainant is entitled to the awarded amount from the insurer.

17. In the case of Shri Ram Life Insurance Company vs. K. Viraja, Revision Petition No. 434 of 2017, decided on 15.01.2020, the Hon'ble National Commission has held that insurance contracts are governed by the principle of "UBERRIMA FIDE' and the proposer applying for insurance is expected to correctly furnish all the material information regarding his health, habits, family history, personal medical history, income etc. Policy holder failed to disclose his pre-proposal health ailment of Hypertension. Accordingly, the order of the State Commission was set aside and the complaint was dismissed.

18. In the case of LIC of India vs. Manish Gupta - Civil Appeal No. 3944 of 2019, decided on 15.04.2019, the Hon'ble Apex Court has held as under:-

"Moreover, non-disclosure of any health event is specifically set out as a ground for excluding the liability of the insurer.

    A contract of insurance involves utmost good faith. In Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., this Court has held thus:

    "...Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. 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. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment."

19. In the case of Civil Appeal No. 4261 of 2019 Reliance Life Insurance Co. Ltd. & Ors. vs. Rekhaben Naresh Bhai Rathore; 2019 CPJ 53 (SC) decided on 24.04.2019, the Hon'ble Apex Court has held as under:-

"26…….. It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.

The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur (supra) "there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance. Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.

We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form…………..”

20. The principles as laid down above, are fully applicable.

21. In the above scenario, we are of the definite opinion that the respondent has concealed the facts about his pre-proposal health ailment from the appellant insurance company, thereby the policy holder, respondent has breached the terms and conditions of the policy.

22. Thus, we are of the definite opinion that the District Commission has not properly considered the exclusion part and the condition No. 7 of the insurance policy on the basis of which the claim of the complainant was repudiated.

23. We hold that the impugned judgment is against the terms and conditions of the insurance policy and it is perverse and not passed as per the mandate provision of law. The District Commission has acted upon with the material irregularity and infirmity, therefore, has not exercised the jurisdiction which was vested in it. Therefore, we are inclined to interfere with the impugned judgment.

24. Accordingly, the appeal is allowed. The impugned judgment is hereby set aside and the complaint shall stand as dismissed. No order as to costs.”

8.      Being dissatisfied by the Impugned Order dated 29.10.2022 passed by the State Commission, the Petitioner / Complainant has filed the instant Revision Petition bearing no.227 of 2023.

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

10.    The case of the Petitioner revolves around the rejection of a claim under a Family Health Optima Insurance Policy. The petitioner contended that the claim was wrongfully repudiated by the insurance company and asserted that the deceased Insured never concealed any material facts. Therefore, the Respondents/Insurance Company’s repudiation is unjustified. He cited various legal precedents to support his case, emphasizing that the State Commission has failed to consider the basic premise of the insurance policy and should not be arbitrary. He sought due settlement of the claim and uphold the order of the District Forum. He has relied upon the following judgments:

(a) LIC vs. Mamta Sipani, 2022 SCC OnLine NCDRC;

(b) Satinder Singh Vs. National Insurance Co. Ltd., 2011 SCC OnLine NCDRC 55;

(c) Sunita Bali & Anr Vs Branch Manager, HDFC Bank, dated 7.7.2023 in R.P. No.229/2019;

(d) Oriental Insurance Co. Ltd. Vs. Ozma Shipping Co. and Anr., (2009) 9 SCC 159.

11.    On the other hand, the contentions and arguments of the Respondent/OP revolves around the assertion that his claim was rightly repudiated due to non-disclosure of material facts at the time of taking the insurance policy. The Respondent/OP relied on certain legal precedents to assert that the proposer has a duty to disclose pre-existing ailments health condition to the insurer.

12.    It is a matter of record that the Petitioner had obtained Family Health Optima Insurance Policy and the Complainant filed the claim of his treatment. However, the OP repudiated the claim for failing to disclose the pre-existing disease as required. Hence, he filed complaint seeking directions to the OP to pay the claim amount along with compensation and interest on account of unreasonable delay and mental harassment. It is an admitted position that the insured was suffering certain ailments and had not disclosed these material facts at the time of taking the insurance policies. The Petitioner did not disclose the medical conditions while filling the proposal and obtained the policy. The Respondent/OP asserted that the contract for insurance is based on utmost good faith and the insured was bound to clearly bring out all prescribed details, including his medical condition. However, he failed to do so. Hon’ble Supreme Court in Bajaj Allianz Life Insurance Company Ltd. v. Dalbir Kaur, 2020 SCC OnLine SC 848 decided on 09.10.2020 has held 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.”

13.    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 Insurance Policy voidable by the Insurer. A Division Bench of the Mysore High Court in VK Srinivasa Setty Vs M/s Premier Life and General Insurance Co Ltd which is cited with approval by the Hon’ble Supreme Court in this case:

31. Finally, the argument of the respondent that the signatures of the assured on the form were taken without explaining the details cannot be accepted. A similar argument was correctly rejected in a decision of a Division Bench of the Mysore High Court in VK Srinivasa Setty v Messers Premier Life and General Insurance Co Ltd21 where it was held:

― Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understanding it. That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form.

- If an agent nevertheless does that, he becomes merely the amanuensis of the insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer.

14.    In the present case, it is the contention of the Petitioner that he was covered under the insurance policy from 30.07.2013 for Rs. Four Lakh. However, his claim amount, which was incurred during hospitalization, was repudiated during the subsistence of the insurance policy on frivolous ground. It is also an admitted position that the insured was diagnosed various ailments before taking the insurance policy in question. While the Complainant asserted that the insured did not conceal about the previous illness, however, the proposal form filled by the insured reveals that he had not mentioned any previous illness.

15.    Based on the aforesaid discussions and the precedents established by the Hon’ble Supreme Court, I am of the considered view that the Order of the State Commission dated 29.10.2022 does not suffer from any infirmity which warrants the interference of this Commission in revisional jurisdiction. The Revision Petition No.227 of 2023 is, therefore, dismissed.

16.    There is no order as to costs. All pending Applications, if any, stand disposed of accordingly.