Haryana

StateCommission

A/516/2016

RELIANCE LIFE INSURANCE CO. - Complainant(s)

Versus

MURTI - Opp.Party(s)

ROHIT GOSWAMI

06 Oct 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :      516 of 2016

Date of Institution:      06.06.2016

Date of Decision :       06.10.2016

1.      Reliance Life Insurance Company Limited, SCO-89, 2^nd Floor Community, Urban Estate-II, Hissar through its Manager.

2.      Reliance Life Insurance Company Limited, 9^th & 10^th Floor, Bld No.-2, R-Tech Park NHirlonh Compound, next to Hub Mall, behind Flex Bldg Goregoan (East) Mumbai-400063.

                                      Appellants-Opposite Parties

Versus

Murti aged 40 years w/o late Balwan, Resident of Village Barchhappur, Tehsil Hansi, District Hansi.

                                      Respondent-Complainant

 

CORAM:             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                         

Present:               Shri Rohit Goswami, Advocate for appellants.

                             Shri Sunil Kumar Kharb, Advocate for respondent.   

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          This Opposite Parties’ appeal is directed against the order dated April 29^th, 2016, passed by District Consumer Disputes Redressal Forum, Hisar (for short ‘District Forum’), in Complaint No.331 of 2012.

2.                Balwan–since deceased (hereinafter referred to as ‘Life Assured)-husband of Murti-complainant/respondent, purchased two Life Insurance Policies bearing No.50830001 (Annexure-1) for Rs.8,50,000/-  and No.50967054 (Annexure-2) for Rs.6,00,000/-, from Reliance Life Insurance Company Limited (for short ‘the Insurance Company’)-Opposite Parties/appellants, vide Proposal Forms dated 11^th March, 2013 and 30^th April, 2013. On July 01^st, 2013, the insured died. Claim being filed, the Insurance Company repudiated the claim vide letter dated 30^th September, 2013 (Annexure-5). Hence, complaint under Section 12 of the Consumer Protection Act, 1986 was filed.

3.                The Insurance  Company-Opposite Party, contested complaint by filing written version stating that the life assured was suffering from CVA for the last four years prior to the purchase of the policy and was also suffering from hypotension retinopathy. He also disclosed his date of birth as 17.06.1970 whereas as per the Voter ID Card the life assured was of 51 years old at the time of issuance of the policy. Thus, the life assured concealed the material fact with respect to his health, so the Insurance Company was not liable to pay any compensation. It was prayed that the complaint be dismissed.

4.                After hearing the learned counsel for the parties and going through the case file, the District Forum vide impugned order allowed complaint. The operative part of the order is reproduced as under:-

“8.     Complainant has filed the claim after the death of her husband who was insured with the respondents with two insurance policies. At the time of insurance or the formalities with regard to age and medical competence, are made by the respondents and the premium has been regularly paid by the deceased and after his death the respondents have repudiated the claim of insured on the ground of the some diseases and discrepancy of age. It is a matter of common knowledge that at the time of insurance, the insurer is examined by the registered medical practitioner and the insurance policy was issued only when there was no adverse report from the doctor with regard to health of insured. Deceased insured was an illiterate person it is clear annexure A-2 his signatures speak in itself that his signature are of illiterate person and in matters of policy taken by illiterate personal burden heavily lies on insurance company to prove allegations of deliberate concealment and misrepresentation as alleged, hence the repudiation is made by the respondents is set aside.”

5.                Learned counsel for the appellants-Insurance Company has argued that the life assured was suffering from a Cerebrovascular Accident (CVA) for the last four years but he did not disclose this fact in the proposal forms at the time of purchasing the policies. So, the Insurance Company was not liable to pay the benefits to the complainant.  Reference was made to the treatment record (dated 14.05.2012) of the life assured (Annexure A-1) which shows that the life assured-Balwan took treatment from Pt. Bhagwat Dayal Sharma Post Graduate Institute of Medical Sciences (PGIMS), Rohtak. It has been clearly mentioned in Annexure A-1 that Balwan was K/C/O (known case of) CVA for four years, besides hypertensive retinopathy.

6.                It is well settled principle of law that the insurer can repudiate the insurance claim if it finds that the policy was got purchased by the insured on mis-statement and by concealment of true fact regarding his health.

7.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

8.                Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

9.                In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“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.”

“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 of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

10.          From the medical record produced on the file, it is established that the life assured was suffering from CVA for four years, besides hypertensive retinopathy prior to the purchase of the insurance policy and he suppressed this fact in his statement in the proposal forms.  In this view of the matter and the law enunciated above, this Commission is of firm opinion that the Insurance Company was justified in repudiating the claim of the complainant.   

11.          Hence, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

12.          The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced: 06.10.2016

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

CL