1.      This Revision Petition is filed under Section ­­­21(b) of Consumer Protection Act, 1986 (the “Act”) against the Rajasthan State Consumer Disputes Redressal Commission, Circuit Bench at Bikaner (‘State Commission’) order dated 23.01.2018 in FA No.317 of 2017 wherein the State Commission allowed the Appeal and set aside the District Consumer Disputes Redressal Forum, Sriganganagar, Rajasthan (“District Forum”) order dated 13.02.2014 in CC No.298 of 2013, wherein the Complaint was dismissed.

2.      For convenience, the parties are referred to as placed in the original complaint before the District Forum.

3.      Brief facts, as per the complainant, are that his uncle, Sukhdev Singh, took a life insurance policy from the Opposite Party (OP) on 30.07.2012 with an annual premium of Rs.20,000. The policy provided a sum assured of Rs.2,00,000 in the event of Sukhdev Singh’s death. The insured passed away on 10.03.2013 due to a heart attack. Following his death, the complainant (nephew of Sukhdev Singh) filed a claim with the insurance company. However, on 03.06.2013, the OP repudiated the claim, stating that Sukhdev Singh had provided incorrect answers to two health-related questions in the proposal form, which violated the terms and conditions of the insurance policy. As a result, the OP paid only Rs.13,599 against the full sum assured. Being aggrieved by the repudiation of the claim, he filed a complaint seeking payment of the full sum assured of Rs.2,00,000, along with Interest and Compensation for mental distress, and Litigation charges.

4.      In joint written version, OPs acknowledged that Sukhdev Singh was insured under the policy and, however, he breached a material condition of the policy by non-disclosure of significant health-related fact. Specifically, he gave false answers to health-related questions, particularly to Question Nos. 13(4) & 13(15) in the proposal form. He was suffering from tuberculosis (TB) prior to taking the policy but he deliberately concealed this information from the OP. The OP argued that if they had known about Sukhdev's TB, they would not have issued the policy. Therefore, the claim was rightly repudiated as they already paid whatever amount was due to his nominee as per policy. 

5.      The District Forum, vide order dated 13.02.2014, dismissed the complaint and directed as under:

“12. We have heard both the parties. Even in the decision of LIC there was same situation that deceased died due to heart attack but was suffering from HIV. Despite this the complaint was dismissed. Hence, the argument of the complainant is not acceptable. In another decision of National Commission 2(2012) CPJ 272 (NC) LIC Vs. Kusum which is based upon decision of Supreme Court is being mentioned here. Any fact which impacts the decision of the insurer regarding acceptance of proposal is a material fact. Even if the facts undisclosed has no nexus with the death of the life assured then also nominee is not entitled for the claim. In the present matter the proposal form is produced before us. Question No.l3(4) & 13(15) (f) have been answered in negative. As per Question 13(4) the life being assured was asked whether during last 10 years he was admitted in hospital or whether he has undergone any operation or any investigation or was being treated on the basis of same? Question 13(15)(f) was regarding TB. Both the questions have been answered in negative. It is not the case of the complainant that these questions were not answered by life assured. In the discussion above we have assumed it to be established that life assured was suffering from TB and was being treated for same before filling of the proposal form. The case of OP is that if they were aware that the life assured is suffering from TB they wouldn't have issued the policy. It was definitely a material fact that life assured being treated for TB was not disclosed to OP. Hence, on the basis of above decisions the complainant is not entitled for the sum assured and the claim has been rightly repudiated.

13. Hence, the complaint is dismissed. Both the parties to bear their own costs.”                  (Extracted from translated copy)

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6.      Being aggrieved by the District Forum order dated 13.02.2014, the Complainant filed an Appeal and the State Commission vide order dated 23.01.2018 allowed the Appeal No.317/2017 with the following observations:

4. Arguments heard and documents on record perused.

5. Appellant's uncle sukhdev singh was insured for an amount of Rs.2,00,000. He died due to heart attack on 10.03.2013. OP repudiated the claim on the ground that deceased life assured was suffering from TB and this disease was not disclosed hence claim has been rightly repudiated.

6. Even if it is accepted that deceased life assured was suffering from TB and this disease was not disclosed at the time of taking insurance even then death of sukhdev singh took place due to heart attack and it has no nexus with the disease of TB.

7. Learned district forum has wrongly dismissed the complaint. Hence, the appeal is accepted. The OP is directed to pay Rs.2,00,000/- to the appellant along with interest @ 9% from 7.8.2013 and compensation of Rs.20,000/- and litigation cost of Rs.10,000/- with 2 months from the date of order in case of non compliance with in the specified time the abovementioned amount will carry interest @ 9%. ”

(Extracted from translated copy)

7.      Dissatisfied by the Impugned Order dated 23.01.2018 the Petitioner/OP filed the instant Revision Petition No.747 of 2018.

8.      In his arguments, the learned Counsel for the petitioner/OP reiterated the grounds taken in the Revision Petition and argued that the present case revolves around the assertion that the claim of the complainant was rightly repudiated due to non-disclosure of material facts regarding the previous ailments at the time of taking the policy. The proposer has duty to disclose pre-existing ailments and health condition to the insurer. There need not be any nexus between the cause of death and false declaration made in the proposal. He relied on LIC of India Vs Kusum Patro (NCDRC, 19.03.2012) – “In fact, the latter (i.e., presence or absence of any nexus between pre-insurance status of health of the life-to-be-assured and the cause/s of his post- insurance death) is of no consequence insofar as the observance of the duty of disclosure of all material facts while/before seeking an insurance coverage is concerned.” In Ajay Parkash Mittal Vs. LIC, 1997(2) CPC 234, it was held by NCDRC that at the time of the policy, insured gave false answers to questions regarding last date of mensuration and her pregnancy. The material facts of her pregnancy were suppressed by the deceased. The insured deceased died of jaundice after six months from the date of child birth. The claim of the complainant was rejected on the ground of suppression of material facts. Moreover, it was held that nexus were not required to be proved by the Corporation. The fact that the L.A. had concealed material facts which would have influenced the decision of the LIC to insure or not to insure was sufficient for repudiation of the claim. Smt. Devamma Vs Branch Manager, LIC of India (NCDRC, 30.01.2014)-"This Judgment upholds the validity of a repudiation of claim on the basis of suppression of material facts and also upholds the principle that there need not be any nexus between the cause of death and the material facts suppressed." LIC of India & Ors vs. Ramamani Patra & Anr (NCDRC, 03.08.2015) - it was observed that [1] there need not be any nexus between the cause of death and the material information suppressed; and [2] the time when the proposal form is filled in, irrespective of the fact whether the risk started earlier or not, is the crucial, main pillar and foundation upon which the whole case rests.

9.      On the other hand, the learned counsel for complainant argued that the case revolves around the rejection of death claim under a life insurance policy and the claim was wrongly repudiated by the insurer and the same is unjustified. The cause of death of the insured was not related to pre-existing illness and the insured died due to heart attack. The insured paid the total installment premium of Rs.13,599 for securing the life of the deceased insured. He argued in favour of the impugned order passed by the State Commission.  He sought the present Revision Petition be dismissed.  He relied upon Hon’ble Supreme Court in the case of Sulbha Prakash Motegaonkar vs. LIC of India, Civil Appeal No.8245 of 2015, decided on 05.10.2015.

10.    I have examined the pleadings and associated documents placed on record, including the orders of the learned District Forum and the State Commission and rendered thoughtful consideration to the arguments advanced by the learned counsel for the Petitioners.

11.    The main issue to be determined is, notwithstanding his answers to the specific questions with respect to his health/ medical conditions, whether the Respondent/Complainant is entitled to claim against the death of the deceased life insured (DLI), who died by heart attack which is not related to previous disease? 

12.    It is undisputed that the the complainant's uncle, Sukhdev Singh, took a life insurance policy from OP on 30.07.2012, with an annual premium of Rs.20,000. The policy provided for Rs.2,00,000 as the sum assured in the event of his death. The insured died on 10.03.2013 due to heart attack and the complainant (the nephew of Sukhdev Singh) filed a claim with the insurer. However, on 03.06.2013, OP repudiated the claim, stating that Sukhdev Singh had provided incorrect answers to two health related questions in the proposal form, which violated the policy terms and conditions. As a result, the OP only paid Rs.13,599 instead of the sum assured. As the life insured had not disclosed his previous illness, the complainant is not entitled any claim under the insurance policy. On the other hand, learned counsel for the complainant argued that the cause insured’s death was not related to pre-existing illness and he died due to heart attack. Thus, he is entitled to claim under the policy based on the judgment of Hon’ble Supreme Court in Sulbha Prakash Motegaonkar vs. LIC of India, Civil Appeal No.8245 of 2015, decided on 05.10.2015.

13.    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”, i.e., utmost good faith. This duty of disclosure is codified in Section 45 of the Insurance Act, 1938 which prohibits any insurance contract being called into question after two (2) years, except where good faith obligations are violated. The insured has duty to the insurer to disclose all material facts, and vice-versa, the insurer must also inform the insured about the terms and conditions of the policy that is going to be issued to him and must conform to the statements in the proposal form or prospectus, or those representations made through his agents. Thus, the principle of utmost good faith imposes meaningful reciprocal duties owed by the parties towards each other.  At the same time, it is undisputed that the complainant had not disclosed about he suffering from TB. While the OP contended that, had the life assured declared his medical condition, the policy would not have issued in the present form, it is also a matter of record that as on the date when the life assured obtained the policy on 30.07.2012, he was already cured of TB. Further, his death on 10.03.2013 was due to suffering heart attack, which is independent of TB, which was already cured.

14.  The Hon’ble Supreme Court in the case of Sulbha Prakash Motegaonkar (Supra) has held as under:

      “We have heard learned counsel for the parties. It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured. In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction. The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

      We are of the opinion that the National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent. The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with his lumbar spondylitis with PID with sciatica. In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.

Accordingly, we set aside the order passed by the National Commission and allow the appeal. The respondent will accept the claim made by the appellants within a period of four weeks from today and make the due payment.”

15.    Further, the Hon’ble Supreme Court in the case of Om Prakash Ahuja versus Reliance General Insurance Co. Ltd., 2023 LiveLaw (SC) 509 wherein it has been held as under:

“26. The ground on which renewal of insurance policy to the appellant is sought to be refused is that while taking the initial policy, the appellant had failed to disclose that his wife (now deceased) was suffering from rheumatic heart disease. Though she expired of cancer. The fact remains that the first policy was taken by the appellant for the period from 07.07.2007 to 06.07.2008, which was renewed for another year. The claims even for the 6 period, wherein valid policy was available with the appellant, were repudiated. Renewal of policy beyond 07.07.2009 onwards was refused relying upon the guidelines issued by the Insurance Regulatory and Development Authority vide communication dated March 31, 2009. The claim of the appellant was repudiated on that very ground namely nondisclosure of the disease by which the wife of the appellant (now deceased) suffered at the time of purchase of initial policy. The repudiation of claim by the insurance company was subject matter of consideration before the Fora at different levels under the Consumer Protection Act, 1986. The rejection of the claim on the ground that there was concealment of certain material facts by the appellant at the time of purchase of policy, was not found to be tenable and the insurance company was directed to reimburse the expenses incurred for the period from 07.07.2007 to 06.07.2009. The aforesaid amount was paid by the insurance company. The order passed by the National Commission was not challenged any further by the Insurance Company. From this, it is established that even the Insurance Company accepted the fact that non-mentioning of the disease from which the deceased wife of the appellant suffered at the time of purchasing the policy was not material, as the death was caused from a different disease all together. Both had no relation with each other. Now, the insurance company cannot be permitted to raise same plea to deny renewal of insurance policy to the appellant for the period from 07.07.2009 onwards. Even though direction was given by the District Forum vide order dated 11.09.2009 to renew the policy further but it was not renewed, till such time interim order was passed by the National Commission on 13.05.2011.”

16.    It is undisputed that the life insured had died due to heart attack during the subsistence of the insurance policy. It is also undisputed that the deceased life insured had paid the premium regarding the life insured. Therefore, in my considered view the Respondent/ Complainant is entitled the claim regarding the death of the life insured due to heart attack which is not related to previous illness, which was already cured.

17.    Considering the above discussion, it is evident that the learned State Commission order dated 23.01.2018 in Appeal No.317/2017 does not suffer any illegality or material irregularity. Therefore, the same is affirmed.

18.    Consequently, the Revision Petition No.747 of 2018 is dismissed.

19.    Considering the circumstances of the case, there shall be no order as to costs. All pending applications, if any, are disposed of accordingly.