1.         The present Revision Petition (RP) has been filed by the Petitioners against Respondent as detailed above, under section 21(b) of Consumer Protection Act 1986, against the order dated 21.05.2018 of the State Consumer Disputes Redressal Commission, Rajasthan (hereinafter referred to as the ‘State Commission’), in First Appeal (FA) No. 21/2017 in which order dated 26.10.2016 of District Consumer Disputes Redressal Forum-I, Moradabad (hereinafter referred to as District Forum) in Consumer Complaint (CC) No. 128/2015 was challenged, inter alia praying for setting aside the judgment and order dated 21.05.2018 passed by the State Commission in FA/21/2017 and the judgment dated 26.10.2016 passed by the District Forum in CC 128/2015.  

2.         While the Revision Petitioners (hereinafter also referred to as OPs) were Appellants before the State Commission and Opposite Parties before the District Forum and the Respondent (hereinafter also referred to as Complainant) was Respondent before the State Commission in FA/21/2017 and Complainant before the District Forum in Complaint No. 128/2015.

3.         Notice was issued to the Respondent/Caveator on 26.04.2019.  Parties filed Written Arguments on 24.01.2023 (Petitioners) and 16.01.2023 (Respondent) respectively. 

4.         Brief facts of the case, as emerged from the RP, Order of the State Commission, Order of the District Forum and other case records are that: -

The Complainant’s husband Sri S.K. Vadhwa had taken two Postal Life Insurance policies from the OP-1/Petitioner herein on 13.05.2009 and 29.05.2009 for insured value of Rs.1,00,000/- each.  The monthly premium in both the policies was as Rs.1175/-.  The policies were to be matured on 13.05.2017 and 29.05.2017 respectively.  Besides the above two policies, the complainant’s husband had also taken the insurance policy from Life Insurance Corporation wherein the death claim had already been settled and paid by the Insurance Company. On 03.11.2009, the complainant’s husband died at Kendriya Hospital, Northern Railway, New Delhi.  When the complainant came back to Moradabad then she came to know about the policies taken by her husband and therefore she applied for payment of death claim vide letter dated 05.03.2010 through OP-1 to OP-2, enclosing therewith the policy book of policies in question, receipts of premium, copy of death certificate.  The complainant also sent an affidavit to OP-2 stating the loss of original policy bonds, with an undertaking that she would produce the same in future if the bonds are found and she would not misuse the bonds.  Vide letter dated 26.06.2010, the OP-2 asked OP-1 to send the claim forms pertaining to the policies in question, the report of enquiry officer and  confidential report wherein the statement of neighbors of complainant were recorded.  Thereafter, the complainant kept on contacting OP-1 regarding the payment of death claim of the policies amounting to Rs.2,00,000/-.OP-1 wrote a letter to the Railway Department, where the deceased husband was working, for requiring the certificate of medical leave taken by the deceased Sri S.K. Vadhwa and the copy of said letter was also sent to the complainant.  Vide letter dated 23.09.2011, the Department (Railway) of complainant’s husband provided the information regarding leave taken by the deceased/insured on medical ground to the OP-1 and copy of thereof was also endorsed to the complainant. Vide letter dated 24.11.2011, OP-2 sought medical prescriptions of complainant’s husband from the period from 16.06.2009 to 03.07.2009. In response to the said letter, the complainant apprised that her husband was not under medical treatment during the said period and he was under treatment only prior to his death. In spite of completion of all required formalities by the complainant, the OP-2 repudiated the death claim of policies vide letter dated 11.08.2014 on the ground of suppression of material fact of his ailment. Hence, the complainant filed complaint before the District Forum.

5.         Vide Order dated 26.10.2016, the District Forum allowed the complaint CC No. 128/2015 and directed the OPs to pay the insured value of both the policies i.e. Rs.1 lakh for each policy total sum of Rs.Two Lakh along with interest @9% p.a. with entire benefits accrued thereon within one month.  The District Forum also directed the OPs to pay Rs.15,000/- as compensation and Rs.2000/- towards cost of complaint.

6.         Aggrieved by the said Order dated 26.10.2016 of District Forum, Petitioners appealed in State Commission and the State Commission vide order dated 21.05.2018 has partly allowed FA No.21/2017 and passed the following order:

“After perusal of material of record and considering the entire aspect of the case, we are of the opinion that the appellants / opposite parties have been unsuccessful to prove that the insured / husband of respondent / complainant was persisting any disease or was ill at the time of submission of proposal form and he had concealed the fact of his illness knowingly in the insurance proposal form and had taken the insurance policy by providing wrong information. The reasons given by the appellants / opposite parties while repudiating the claim of both the policies are not liable to be considered. Thus the direction for payment of insured value along with interest @ 9% per annum to the appellants / opposite parties is justified. No interference is required in said direction.

Since the District Forum has awarded the insured value of both the policies along with interest and as such we are of the opinion that the compensation awarded in favor of respondent / complainant amounting to Rs.15,000/-, against the appellants / opposite parties is liable to be set aside.

The cost of litigation awarded by District Forum as Rs.2,000/- payable to  respondent/complainant is proper and does not require any interference.

On the basis of aforesaid conclusion the appeal is partly allowed. The amount of compensation Rs.15,000/- awarded in favor of respondent / complainant is hereby set aside. The remaining part of judgment shall be as it is.”

7.         Petitioners have challenged the said Order dated 21.05.2018 of the State Commission mainly on following grounds:

The Court below ought to have considered the suppression of facts vitiates the insurance contract as the contract of insurance is an act of good faith and confidence reposed in either side by the parties to contract and the contract gets vitiates if there is an element of concealment.The Fora below committed mistake of law while ignoring the evidence led by the Revisionists particularly when it is settled proposition of law that the evidence could be taken at any stage of the case subject to satisfying the court about the procurement and availability of the same and while not considering the evidence the Fora below has failed to exercise its jurisdiction so vested in it. Both the Fora below, while entertaining and allowing the case of respondent, ought to have examined that all contracts of insurance being contract of good faith, a person effecting a life policy has to disclose all the facts to the insurer and if conceals anything which may influence the grant of insurance or the rate of premium, it is a fraud and vitiates the policy.

The court below committed mistake of law and facts both while not allowing the appeal of revisionists ignoring the relevant rules particularly Rule 39 (old) and Rule 52 and 53 of the Rules of 2011 and in view of the fact and legal proposition that the revisionists were under obligation to follow the rules pertaining to the policy. The court below erred in law while holding the deficiency in service on the part of revisionists particularly when the revisionists have only followed the rules relating to Postal Life Insurance Fund Rules while settling the claim of respondent.

The Court below failed to appreciate that the burden of proof or onus lies on the respondent to disprove the basis and the reasons for taking leave on medical ground and at any stage of the case the respondent did not rebut or controvert the fact of medical leave taken by the policy holder.

The court below failed to appreciate that the action of revisionists in repudiating the claim was justified, in view of rules pertaining to the policy and the declaration filled by the insurant himself in proposal form. Thecourt below while allowing the complaint of respondent has exercised the jurisdiction not vested in it.

The District Forum has not taken the written statement on record and on the other hand discussed the pleadings taken by the revisionists.The StateCommission has failed to appreciate that the evidence adduced by the revisionists was in support of pleadings taken in the written statement. In the written statement filed before the forum below, it was clearly mentioned that the employer of policy holder has provided the detail of medical leave taken by him before taking the policies in question. The court below failed to appreciate and examine the fact that the policy holder was on medical leave from 07.02.2008 to 24.05.2008, 16.06.2009 to 03.07.2009 and 20.10.2009 to 03.11.2009 and as such it was clear that the deceased had proceeded on long leave before taking policies i.e. three months and sixteen days and as such in view of the various judgments passed by Commission, the complaint was liable to be dismissed. It is settled proposition of law that doors of the Court / Fora are open to them who approach the Court with clean hands and in the present case, it is clearly evident that the respondent had sought shelter of the Court by suppressing the material fact of the pre-existing disease and treatment taken from the Central Hospital Northern Railway, New Delhi, as appears from the document made available by the Hospital itself.

The court below ought to have dismissed the complaint on the basis of the facts based on evidence so that the frivolous complaint may be checked and stopped to be filed. The court below failed to consider that any deficiency in service in the present case was to be determined by taking into account the mandatory provisions of Postal Life Insurance Fund Rules to which the contract was subject to.

The provisions of Section 3 of the Consumer Protection Act 1986 clearly states that the provisions of this Act are in addition to and not in derogation of any other law for the time being in force.

8.         Heard counsels of both sides. 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.

8.1       In addition to the averments made under the grounds (para 7), the petitioner contended that the husband of the Respondent was diagnosed Adenoid Cystic Carcinoma (Post Chemo, Post Radio) one year back as per the Central Hospital, Northern Railway New Delhi, as per discharge Slip dated 12.10.2009.  The Medical documents enclosed clearly show that the deceased/insured was suffering from Adenoid cystic carcinoma.  The Central Hospital, Northern Railway New Delhi referred his case to AIIMS Radiotherapy Department.  He expired on 03.11.2009.  All the documents show that the deceased was suffering from Cancer for the last one year and his family cannot deny the fact.  While filling up the proposal form on 27.05.2009, in Column 15 Family History – in response to Are you at present in sound Health written-YES. In response to ‘Have you ever suffered from any of the following: (i) Tuberculosis (ii) Cancer (iii)(iv)(v)(vi)(vii)(viii)(ix)(x) any other serious   “No”.  The complainant’s husband concealed the fact about his illness deliberately just to secure the policy.   There is a clear presumption that any information sought for in the proposal from is Material for the purpose of entering into a contract of Insurance.  In support of their contentions, the Petitioners have relied upon the Judgment passed by the Hon’ble Supreme Court in Branch Manager, Bajaj Allianz Life Insurance Co. Ltd. & Ors. Vs. Dalbir Kaur, CA No 3397/2020, decided on 9^th October 2020. It is also contended that the Hon’ble Supreme Court in number of cases has set aside the orders of NCDRC and Court held that “the upshot of the entire discussion is that in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a material fact.  If the proposer has knowledge of such fact he is obliged to disclose it particularly while answering question in the proposal form.  In the present case the Petitioner was misled to issue the Policy by concealing the Material fact knowingly, which clearly established the material irregularity and is a case of willful suppression of Material Fact by the husband of Respondent.  Hence, the petitioner has rightly rejected the claim of the respondent.  It is further contended that the said policy was issued under Rule 39 of the Post Office Life Insurance Rules-2011 and due to concealment of material facts regarding good health at the time of purchasing the policy.  No value is admissible on void policies under said Rule and the premium deposited therein is forfeited. 

8.2       On the other hand Respondent contended that the Petitioners are relying on the documents which are not part of the record of any of the Fora below.   In the Revision Petition, the Petitioners have filed supplementary affidavit to bring new facts and documents on record, which pertains to the year 2009.  The Petitioner is a Govt. Department and documents also belong to a Govt. Hospital.  No reason has been given by the Petitioner as to why such affidavit/application seeking additional documents were never filed before both the Fora below.  This is beyond the scope of a revision petition.  The Petitioners cannot skirt the due process of law.  The Petitioner cannot bring new documents at this stage particularly when both the Fora below have decided the case against the Petitioners and have given concurrent findings. By allowing such application to bring additional documents at the stage of revision petition, would tantamount to re-adjudication of the points already decided.  Allowing such application at this stage would cause irreparable loss and injury to the Respondent and this is beyond the ambit of revisional jurisdiction.  In support of her contentions, the Respondent has relied upon the following judgments:

i)         Dharamvir v. Ankur Seeds Pvt. Ltd., 2015 SCC OnLine NCDRC 598.

ii)        Golden Multi Services Club Limited v. Satchidananda Behera, 2015 SCC OnLine NCDRC 2964.

iii)       Lucknow Development Authority v. Suresh Kumar, 2018 SCC OnLine NCDRC 858.

iv)       AIC of India Ltd. v. Bhemappa Yamanappa Tagadi, 2020 SCC OnLine NCDRC 621.

It is further contended by the Respondent that the Petitioners were ex parte before the District Forum and have not filed any evidence.  The only document filed by the Petitioners was copy of Post Office Insurance Policy Rules. Before the State Commission, no document was filed except proposal form.  Even the Insurance Policies were never filed or marked as evidence by the Petitioners at any stage. On 03.10.2018, the Petitioner had made a false submission before this Commission that no evidence was filed before the District Forum.  However, the District Forum has recorded that the Complainant/Respondent has filed its evidence by way affidavit.  This conduct needs an answer particularly when Petitioner itself has taken a ground (ground B) in this petition that Appellate Commission has ignored the evidence.  After keeping the claim pending for almost 4 years, the Petitioners repudiated the Respondent’s claim through repudiation letter dated 11.08.2014 on the ground that insurance policy has become void under Rule 39 of Post Office Life Insurance Rules, 2011 due to concealment of facts regarding good health at the time of purchase of policy.  Because the policies were called in question after expiry of 3 years, the repudiation has become illegal and bad in law as per Section 45 (1) of the Insurance Act, 1938 according to which no life insurance policy can be called in question on any ground whatsoever after expiry of 3 years from its concealment. The petitioners have not refunded the premium amount for the policies in question.  Relied upon the judgment of this Commission in Life Insurance Corporation of India v. Jaswinder Kaur, 2019 SCC OnLine NCDRC 100. It is further contended that there was no concealment of facts regarding good health at the time of purchase of policy. The burden is on insurance company to justify the meaning & relevance of ‘good health’ particularly when their own medical officer has examined, certified and recommended the insured to be medically fit for the policy.  Relied upon the judgments in Saurashtra Chemicals Pvt. Ltd. Vs. National Insurance Co. Ltd. [Civil Appeal No. 2059 of 2015] and in the case of M/s Mudit Roadways Vs. New India Assurance, CC/765/2022, NCDRC, decided on 10.08.2018.   There is no nexus between reference to the sick leave period in Railway’s letter dated 23.09.2011 and the ground of repudiation ‘good health’ in the repudiation letter dated 11.08.2014.  As the Railway’s letter dated 23.09.2011 has mentioned that the insured was on sick leave therefore insurance company has assumed that insured was under some illness which is gross to a degree that it cancels out their own medical certificate issued by their own medical officer at the time of purchase of policy.  District Forum vide order dated 13.01.2016,  refused to take Written Statement on record as the Petitioners herein did not file the within the statutory period of 45 days and the petitioners never challenged the said order of the District Forum, hence become final. Vide judgment dated 26.10.2016 the District Forum held the Petitioners to be deficient in service in not making the claim payment.  To improve their case, the Petitioners filed proposal form for the first time before the State Commission.  The State Commission dismissed the Appeal and held that it cannot be presumed that the insured was on leave due to illness.  While appreciating the particulars of proposal form, the State Commission held that if the word ‘disease’ in column 6 denotes ‘any disease’ then there was no reason to mention specific diseases in other columns.  The Petitioners are trying to re-appreciate the facts and evidence which are already adjudicated by two forums below through concurrent findings.  The findings cannot be interfered with unless Petitioner points out some material irregularity or jurisdictional error which is so grave that it goes to the root of the matter.   The Respondent has relied upon various judgments in support of his contentions, Rubi (Chandra) Dutta v. United India Insurance Co. Ltd.  (2011) 11 SCC 269, para 23; Ajit S. Jain v. Usha Khare, 2022 SCC OnLine NCDRC 185, para 13; Rajiv Shukla v. Gold Rush Sales & Services Ltd. (2022) 9 SCC 31, Para 12,13,14; Lourdes Society Shehanjali Girls Hostel and Ors. Vs. H&R Johnson (India) Ltd. and others, (2016) 8 Supreme Court Cases 286 and Oriental Insurance Co. Ltd. v. Bedan Bai (RP/1284/2012) judgment dated 14.12.2022.

9.         In this case, there are concurrent findings of both the Fora below against the petitioner herein. The main reason for repudiating the claim of the Respondent/Complainant under two policies is suppression of material fact with respect to pre-existing ailments. It is the case of the Petitioner/ Postal Department that in the proposal form dated 27.05.2009, the insured has given following answers (only one proposal form dated 27.05.2009 has been produced while there were two policies one dated 13.05.2009 and second 29.05.2009) :

“Note : The term family include, mother, father, brothers and sisters

Personal history :

Are you at present in sound health – Yes

Have you ever suffered from any of the following?

 Tubercuosis (ii) Cancer (iii) Paralysis (iv) Insanity (v) Any disease of the heart and lungs (vi) disease (vii) any disease of brain (viii) Diabetes (ix) Hypertention (x) Any other serious – No

(xi) Any physical deformity or – No”

10.       The case of the petitioner is that the insured was suffering from cancer for which he was getting treatment from Railway Hospital. During the hearing on 25.01.2024, in support of his contention, counsel for the petitioner wanted to rely on various medical prescriptions. Counsel for respondent objected to these, initially counsel for respondent stated that all the medical documents on which the petitioner is relying/wants to rely were filed before the State Commission through supplementary affidavit dated 27.1.2018, but this affidavit was subsequently withdrawn and hence these medical documents are not part of record of State Commission. For this, he drew our attention to the record of State Commission which contains letter dated 26.12.2017 of the counsel of the petitioner before the State Commission.  But this letter pertained to withdrawal of supplementary affidavit filed on 9.6.2017 and not the affidavit dated 27.1.2018, as affidavit dated 27.1.2018 could not  have been withdrawn on an earlier date i.e. 26.12.2017. Subsequently, the counsel for respondent contended that the affidavit dated 27.1.2018 through which various medical records were claimed to have been filed as annexure were never filed before the State Commission. The record of State Commission, which have been summoned, do not contain any such affidavit or the medical record.  Hence, petitioner cannot place any reliance on the medical record now as the scope in revision petition is limited and no additional documents can be allowed to be placed at the stage of revision petition.

11.  In view of this, Counsel for the Petitioner sought a short adjournment to check all the records and come out with a specific response as to whether the affidavit dated 27.01.2018, which had all the medical records/prescription as annexures on which he wishes to rely, was actually filed before the State Commission or not, if Yes, why it is not part of record of the State Commission, which are now available with the National Commission.

12.       In pursuance to the said directions, the Petitioner filed an Affidavit on 16.02.2024, in which the Petitioner claimed that all the documents with additional  Affidavit dated 27.01.2018 were filed before the State Commission by the Government Counsel but  the Petitioner have no knowledge as to why the documents are not the part of the State Commission’s record.  Extract of the relevant para of the affidavit is reproduced below:

“That it is respectful submission of the Petitioners that all the documents with the Additional Affidavit dt. 27-01-2018 were filed before the Hon’ble State Commission by the Govt. Counsel Dr. Udai Veer Singh.  That as office record also the additional affidavit dated 27-01-2018 alongwith documents has been filed.

That regarding why the documents are not part of State Commission Record, the Petitioner have no knowledge of the same. “

13.       We are not finding the above said reasoning convincing. Had the Petitioner filed such documents with the State Commission, these could have very well being part of the State Commission’s record and could been considered by the State Commission. Hence, we are of the view that no such documents possibly have been filed by the Petitioner before the State Commission vide their affidavit dated 27.01.2018, as claimed. No doubt, as has been held by Hon’ble Supreme Court in catena of judgments.  In Manmohan Nanda Vs. United India Assurance Company Limited and Anr. (2022) 4 SCC 582, Hon’ble Supreme Court observed that Insurance contracts are special contracts based on the general principles of full disclosure inasmuch as a person seeking insurance is bound to disclose all material facts relating to the risk involved.  Law demands a higher standard of good faith in matters of insurance contracts which is expressed in the legal maxim uberrimae fidei.  Similar observations were made by Hon’ble Supreme Court in Branch Manager, Bajaj Allianz Life Insurance Company Limited & Others Vs. Dalbir Kaur (2021) 13 SCC 553, wherein the Hon’ble Supreme Court held that the insurance claim can be repudiated on the grounds of non-disclosure of true and full material information sought in the proposal form and in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. (2009) 8 SCC 316, it was held that suppression of material facts in the proposal form/ non-disclosure/suppression of material facts in the proposal form entitles the  Insurance Company to repudiate the insurance claim.  However, as has been held by Hon’ble Supreme Court Hon’ble Supreme Court in LIC of India Vs. Smt. G.M. Channabasamma (1991) 1 SCC 357, in which it was held that a contract of ‘insurance’ is a contract of ‘uberrima fides’ and there must be complete good faith on the part of the assured, burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the Insurance Company.  In the absence of any cogent and reliable evidence given by the Insurance Company with respect  to filing of the requisite documents relating to the treatment record of the deceased before the State Commission vide Affidavit dated 27.01.2018, we are of the view that at the revision stage, the Insurance Company cannot rely on such documents.  Hence, in the present case, the Insurance Company has failed to discharge its burden of proving that the insured had made any false representations or suppressed any material fact in the proposal form. The State Commission has given a well-reasoned order and we do not find any reason to interfere with its finding. As has been held by Hon’ble Supreme Court in catena of judgments^[1] revisional jurisdiction of the National Commission is extremely limited, it should be exercised only in case as contemplated within the parameters specified in the provision i.e. when State Commission had exercised a jurisdiction not vested in it by law or had failed to exercise jurisdiction so vested or had acted in the exercise of its jurisdiction so vested or had acted in the exercise of its jurisdiction illegally or with material irregularity. It is only when such findings are found to be against any provisions of law or against the pleadings or evidence or are found to be wholly perverse, a case for interference may call for at the second appellate (revisional) jurisdiction. In exercising of revisonal jurisdiction, the National Commission has no jurisdiction to interfere with concurrent findings recorded by the District Forum and the State Commission, which are on appreciation of evidence on record.

14.       In view of the foregoing, we are of the considered view that State Commission has given a well-reasoned order and we find no reason to interfere with its findings. We find no illegality or material irregularity or jurisdictional error in the order of the State Commission, hence the same is upheld. Accordingly, the Revision Petition is dismissed.

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