1.      The present Revision Petition (RP) has been filed by the Petitioner against Respondent as detailed above, under section 58 1 (b) of Consumer Protection Act 2019, against the order dated 17.06.2022 of the State Consumer Disputes Redressal Commission Madhya Pradesh (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No. 397 of 2015 in which order dated 17.06.2022 of District Consumer Disputes Redressal Commission Jabalpur (hereinafter referred to as District Commission) in Consumer Complaint (CC) no. 64 of 2014 was challenged, inter alia praying for setting aside the order of the State Commission dated 17.06.2022 of the State Commission.

2.  The Revision Petitioner (hereinafter also referred to as OP) was Appellant before the State Commission and OP(s) before the District Forum, the Respondent (hereinafter also referred to as Complainant) was the Respondent before the State Commission and Complainant before the District Forum.

3.      Notice was issued to the Respondent on 18.08.2022.  The Petitioner filed Written Arguments/Synopsis on 08.02.2024.  Respondent also filed Written Arguments / Synopsis on 27.01.2022 and 03.01.2024. 

4.      Brief facts of the case as presented by the Complainant and as emerged from the RP, Order of the State Commission, Order of the District Commission and other case records are that Complainant purchased SBI Life Hospital Cash Policy on 26.01.2012 by paying a premium of  Rs.4159/-. The maturity of the policy was due in the year 2015.    As per the payment schedule given by the OP, the Complainant paid the instalments from time to time.

5.      It is further the case of the Complainant that OPs issued information letter on 31.01.2014 to the Complainant  that sum assured has been enhanced from 2,00,000/- to 2.10,000/- which was further enhanced to Rs.2,20,000/-.  The Complainant started experiencing urine problem in March 2011.  The Complainant consulted doctor who  advised him treatment for optical internal urethrotomy.  The Complainant again faced problem in May 2012 and was comfortable after taking antibiotic medicines.  The said problem again occurred in May 2012. He was hospitalized for one day care in Mahakoshal Hospital, Jabalpur.  The complainant incurred medical expenses, which he claimed with the OP.  The OP, however, repudiated the claim on the ground that 24 hour hospitalization is must for claiming a medical expenses and day care is not covered.

6.      The Complainant again started experiencing problem related to urine, for which he consulted Dr. N P Gupta, Urologist of Medanta Global Health Pvt. Ltd. Gurgaon.  The doctor suggested operation for ‘Recurrent Stricture urethra Proximal Bulbar Area’.  He was operated at the said hospital.  It is the case of the Complainant that he incurred Rs.1,03,240/.  Complainant submitted his claim to the OP but the same was again repudiated by the OP on the ground that it is a pre existing disease and his policy stand cancelled and no further premium will be accepted under the said policy.  Being aggrieved, the Complainant filed CC before the District Forum and District Forum vide order dated 15.04.2015 directed as under:

a.       Non applicant jointly or separately, within one month restore the mediclaimof the Complainant and pay the amount and also pay interest on the claimed amount at the rate of 8% p.a. from the date of cancellation of insurance claim from 03.02.2014.

b.       Non-applicant jointly or separately will pay Rs.500/- to the complainant and will also pay Rs.1000/- towards litigation expenses within one month otherwise non applicant on non payment of awarded amount, will pay interest @ 10% p.a. till the realization.

7.       Being aggrieved, the OPs preferred Appeal before the State Commission and State Commission and State Commission vide order dated 17.06.2022 upheld the order of the District Forum.   Therefore, the Petitioner is  before us now in the present RP.

8.      Petitioner had challenged the said Order dated 17.06.2022 of the State Commission mainly on following grounds:

1. The Fora below failed to appreciate the terms and conditions of the policy.  State Commission has wrongly interpreted that if pre existing disease of the insured comes to the knowledge of the insurer after taking the policy, then it will be automatically covered after renewal.

2. Insurance Contract is a contract of utmost good faith wherein the proposer is duty bound to disclose everything concerning his health, habits and other related matters which are within his knowledge at the time of making the proposal, failing which the insurer has every right to repudiate the claim.

3. The Fora below failed to appreciate that complainant was suffering from Optical Internal Urethrotomy prior to date of commencement of risk, at the time of signing the proposal form.  In the proposal form, the complainant replied in the negative to question no.9 “have any of the person been hospitalized or consulted a specialist for medical advice, tests, treatment or an  operation in the past 5 years “.  From the medical records, it is clear that complainant was suffering from Optical Internal Urethrotomy much prior to the date of commencement of policy, which fact was suppressed by him.

4. The Fora below failed to appreciate that policy in dispute is not a mediclaim policy wherein the medical expenses are reimbursed.  The policy is a Hospital cash policy wherein the benefits are the fixed amount payable depending on the number of days of hospitalization.  In the present case, the claim is for hospitalization of three days non ICU and hence the claim amount is only Rs.6000/-.  The complainant is not entitled to get the same due to suppression of material facts of pre existing illness.

5.  The Fora below wrongly accepted the contention of the complainant that claim of the complainant submitted in March 2013 for taking treatment in Mahakoushal Hospital, Jabalpur was rejected by the Petitioner and in the said claim, the facts of pre existing illness was stated.  However, the Petitioner never received any claim request for taking treatment in Mahakoushal Hospital, Jabalpur in March 2013, and hence there is no question of repudiation of said claim.  The Petitioner received only two claims under the disputed policy, one is for the  hospitalization in Global Health Pvt. Ltd. which was repudiated and other is for hospitalization I Asha Kiran Urology and Yurogynae Center, Jabalpur for the treatment of cystoscope on 11.03.2013.

6. The  Fora below ignored the contention and supporting documents submitted by the Petitioner that the Petitioner received first hospitalization claim under the policy on 10.04.2013.  The complainant was admitted in Aasha Kiran Urology and Yurogynae Center, Jabalpur for treatment of cystoscope on 11.03.2013.  The claim was registered but the papers submitted by the complainant were incomplete and hence the Petitioner requested the complainant to provide pending documents.  The same, however, was not received from the Complainant and hence the claim was closed as ‘no claim’ and same was intimated to the Complainant.  Thus, the Petitioner had no opportunity of knowing the suppressed medical history because the Complainant did not submit the discharge summary previously.

7. The Fora below wrongly observed that Petitioner was aware of the pre existing illness of Optical Internal Urethrotomy of the Complainant and decision to repudiate the claim based  on suppression of pre-existing illness of Optical Internal urethrotomy at the time of taking the policy is not correct because respondent has mentioned about his illness in his claim for taking treatment in Mahakoushal Hospital, Jabalpur. The Petitioner never received any claim for taking treatment in Mahakoushal Hospital, Jabalpur in March 2013.  The Petitioner had received the claim for hospitalization on 11.03.2013 in Aasha Kiran urology and Yurogynae Center, Jabalpur.  However, the said claim was closed for not providing the original discharge summary.  Further, the Petitioner has examined the documents submitted by the Complainant for his claim and observed that said documents do not reveal the facts of suppression of material facts of pre-existing illness of Optical Internal Urethrotomy by the complainant in the proposal form.

8. The Fora below wrongly concluded that complainant was not hospitalized for taking any treatment. 

9. The Petitioner has acted as per the terms and conditions of the policy and contract has to be interpreted as per the terms and conditions of the document.

10. Reliance has been placed on various judgments of the Hon’ble Supreme Court / National Commission, inter alia the following :

1. Vikram Greentech (I) Ltd. and Anr. Vs. New India Assurance Co. Ltd. II (2009) CPJ 34 (SC)

2. General Assurance Society Ltd.Vs. Chandumull Jain and Anr. AIR 1966 SC 1644

3. Oriental Insurance Co. Ltd. Vs. Sony Cheriyan ( 1999) 6 SCC 4511

4. United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal (2004) 8 SCC 644

5. Swift Limited Vs. New India Insurance Co. Ltd. – FA No. 157 of 2006.

6. Reliance Life Insurance Co. Ltd. Vs. Madhavacharya – RP No. 211 of 2009

7. United India Insurance Co. Ltd. Vs. Subhash Chandra – RP No. 469 of 2006.

9.      Heard learned counsel for the Petitioner. However, as respondent had filed written submissions and requested that case may be decided based on his written submissions, the same have been duly considered while deciding the case. Contentions/pleas of the parties, on various issues raised in the RP, Written Arguments, and Oral Arguments advanced during the hearing, are summed up below.

9.1    Learned counsel for the Petitioner argued that based on the proposal form submitted by the complainant and believing the information furnished therein to be true and accurate, the Petitioner had accepted the risk under the doctrine of utmost good faith and issued the policy for daily hospital cash benefit for non ICU Rs.2000/- per day and ICU benefit Rs.4000/- per day, a maximum sum assured of Rs.2,00,000/- per year.  It is further argued that while examining the medical records of the Complainant, it was observed that as stated in the discharge summary issued by Global Health Pvt. Ltd., the complainant was under treatment for Recurrent Stricture Urethra Proximal Bulbar area with BPH GP 1-2 with BOO, Type II Diabetes Mellitus and he was under treatment of Optical Internal Urethrotomy in 2011 and March 2013.  Learned counsel further argued that complainant is a known case of Stricture Urethra with LUTS, 2 years history of Optical Internal Urethrotomy.  The Complainant has replied negative to the question no.9 relating to the hospitalization, test, treatment or operation in the past five years but as per the documents submitted by the complainant, it is clear that the complainant was diagnosed and under treatment of Optical Internal Urethrotomy in 2011, which is prior to the date of commencement of policy.  The fact was suppressed by the complainant in the proposal form.  Further, as per the terms and conditions of the policy, the claim was repudiated and the policy was cancelled being void ab initio. 

9.2    The respondent in his written submissions apart from mentioning the points which have been stated in para nos. 5 and 6 stated that at the time of purchase of policy, it was not disclosed by the agent as well as an official of the insurance company that there is an exclusion clause in the policy and that as per the clause, pre-existing disease or illness will not be covered under the policy.   It is further argued that it is the pre-requirement of medical policy that only when the insurance company is satisfied with medical and physical condition of the assured then only the health policy is issued. The respondent has signed blank proposal form in front of the official / insurance agent of the insurance company and that too without any explanation about the terms and condition of the policy to be disclosed to the respondent. 

10.    We have carefully gone through the orders of the State Commission, District Forum and other relevant records.  The main reason for repudiation of the claim of the Complainant by the OP Insurance Company is the suppression of material facts relating to pre-existing ailments in the proposal form.  In his written submissions, the Complainant-Respondent states that ‘at the time of purchase of the policy, it has not been disclosed once, by the agent as well as an official of the Insurance Company, that there is an exclusion clause in the policy and that, as per clause, pre-existing diseases or illness will not be covered under the policy, and this fact is very evident from the policy documents’, stating further “that the respondent has signed blank proposal form in front the official / insurance agent of the Insurance Company and that too without any explanation by the official / insurance agent of the Insurance Company”.  Both the Fora below have observed that there was no concealment of facts by the Complainant in the proposal form. State Commission in its order has observed as follows :

6        It is clear from the case that Complainant had taken SBI Life Hospital Cash Plan from the OP on 26.01.2012 for the period 31.01.2012 to 31.01.2015.  In the month of March, 2013, he got treated at Mahakaushal Hospital due to urine discharge problem but  his claim was rejected by the OP on the ground that he was not admitted in the hospital for 24 hours.  When the problem again occurred, the complainant took treatment by getting admission at Medanta Global Health Private Ltd. Gurgaon, where Rs.1.03,240.38 was incurred.  The claimwas rejected by the OP on the ground that he had obtained the said policy by concealing his previous illness.

7.       It is clear from the case that claim was presented by the complainant for the treatment at Mahakaushal Hospital, Jabalpur, which was denied by the OP as ‘no claim’ on account of non furnishing of documents.  It is clear that OP received the information of the complainant regarding Optical Internal Urethrotomy. Inspite of that OP got the premium from the Complainant. On the basis of this, it was observed by the District Forum that OP is responsible for providing the amount for the treatment incurred by the complainant at Global Health Private Ltd. Gurgaon

8.  In Savita Garg Vs. Director National Heart Institute IV (2004) CPJ 40 (SC), the Hon’ble Supreme Court held that the Consumer Forum is primarily meant to provide better protection in the interest of the consumers and not to short circuit the matter or to defeat the claim on technical grounds.  In Dharmender Goel Vs. Oriental Insurance Company Limited III (2008) CPJ 63 (SC), the Hon’ble Supreme Court held that the Court must take a realistic view and if a particular claim to compensation is possible on the material on record, it should not be denied on hypertechnical pleas. It is clear that order of the District Forum dated 15.04.2015 after detailed consideration of all the facts and circumstances of the case, in which various judicial pronouncements have been taken into consideration.

9.       On the basis of above discussion, the Appellant has not been able to prove that order of the District Forum suffers from any law point and procedure.  The appeal is dismissed and order passed by the District Forum dated 15.04.2014 is upheld.

11.    As has been held by Hon’ble Supreme Court in catena of judgments[1] suppression of material facts relating to pre existing ailments in the proposal form entitles the Insurance Company to repudiate the claim.  However, as was held by Hon’ble Supreme Court in LIC of India Vs. G M Channabasamma (1991) 1 SCC 357, burden of proving that  insured made false representations and suppressed material facts is undoubtedly on the Insurance Company.  Further, Hon’ble Supreme Court in Sulbha Prakash Motogaonkar and Others Vs. Life Insurance Corporation of India and Others 2021 13 SCC 561 held that there should be a nexus with pre existing disease and disease for which claim  has  been made.  In the present case, existence of pre-existing disease and its non-disclosure in the proposal form is not in dispute, which is evident from the complainant – respondent’s own contentions cited in para 10 above that he was not told about the exclusion clause in the policy that pre-existing diseases or illness will not be covered under the policy. The medical records show that the insured was having the ailments for which claim has been made, even prior to the taking of the policy / filling up of the proposal form, but the same has not been disclosed in the proposal form. The contentions of the complainant-respondent that he signed blank proposal form in front of official / Insurance agent of the Insurance Company and that too without any explanation by the official / insurance agent of the Insurance Company is untenable.  It was held by the Hon’ble Supreme Court in Reliance Life Insurance Company Limited & Anr. Vs. Rekhaben Nareshbhai Rathod reported in (2019) 6 SCC 175 that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequences arising there from by pleading that he chose to sign the proposal, containing such statement without either reading it or understanding it.  Observations of State Commission in para 7 of its order that “It is clear from the case that claim was presented by the complainant for the treatment at Mahakaushal Hospital, Jabalpur, which was denied by the OP as ‘no claim’ on account of non furnishing of documents.  It is clear that OP had received the information of the complainant regarding Optical Internal Urethrotomy. Inspite of that OP got the premium from the Complainant. On the basis of this, it was observed by the District Forum that OP is responsible for providing the amount for the treatment incurred by the complainant at Global Health Private Ltd. Gurgaon” are not correct. The policy under which instant claim was rejected was not a fresh policy but continuation of the earlier policy only, in the proposal form of which there is a non-disclosure of pre-existing ailments.  This is evident from the reading of policy, which is ‘SBI Life-Hospital Cash’ policy issued on 31.01.2012 with premium periodicity yearly’.  It is not the case that it was a policy only for one year, and subsequent policy (ies) were fresh policy / its renewal.  The policy defines the ‘policy term’ as ‘the period, during which the contractual benefits are payable’.  No doubt the previous claim was denied on the ground that he was not admitted in hospital for a minimum of 24 hours, which was one of the requirements of the policy, hence, possibly the Insurance Company did not have the occasion / need to go further to see fulfilment of other conditions for accepting the claim like suppression of material facts relating to pre-existing disease etc.  Hence, in a subsequent claim, Insurance Company was well within its rights to look into these aspects when the condition of 24 hours or more hospitalization  was met in case of subsequent claim under the same policy, in the proposal form of which, material facts relating to pre-existing ailments have not been disclosed.  Hence, in view of the foregoing, we are of the considered view that Insurance Company was justified in repudiating the claim and both the State Commission and District Forum went wrong, District Forum in allowing the Complainant and State Commission in dismissing the appeal filed by the Insurance Company. Order of the State Commission suffers from a material irregularity, hence cannot be sustained.  Accordingly, RP is allowed, order of State Commission dated 17.06.2022 is set aside and complaint is dismissed.

12.    The pending IAs in the case, if any, also stand disposed off.