Haryana

StateCommission

A/74/2015

BIRLA SUN LIFE INSURANCE CO.LTD. & ANR. - Complainant(s)

Versus

RAKESH - Opp.Party(s)

S.C.THATAI

14 Sep 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :         74 of 2015

Date of Institution:       21.01.2015

Date of Decision :        14.09.2015

 

1.     Birla Sun Life Insurance Company Limited Registered Office: One India Bulls Centre, Tower 1, 15^th & 16^th Jupitar Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai-400013 through Ms. Aakriti Manocha, Assistant Manager-Legal.

 

2.     Birla Sun Life Insurance Company Limited, Fatehabad, Branch Fatehabad Tehsil and District Fatehabad, through its Branch Manager near Canara Bank, GT Road, Fatehabad.

                                      Appellants-Opposite Parties

Versus

 

Rakesh s/o Sh. Dharampal, Resident of Village Ghotra Patta, Tehsil Bhadra, District Hanumangarh, Haryana.

                                      Respondent-Complainant

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                         

Present:               Shri S.C. Thatai, Advocate for appellants.

                             Shri Sant Lal Barwala, Advocate for respondent.

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

Birla Sun Life Insurance Company Limited (for short ‘Birla Sun Life’)-Opposite Parties, are in appeal against dated December 8^th, 2014, passed by District Consumer Disputes Redressal Forum (for short ‘District Forum’), Fatehabad, whereby complaint filed by Rakesh –complainant-respondent, seeking direction to the Birla Sun Life to pay the insurable benefits with respect to the Life Insurance Policy, was accepted.

2.      Sajna-since deceased (hereinafter referred to as ‘the assured’) purchased a Life Insurance Policy No.5645986 for Rs.15.00 lacs from Birla Sun Life-appellants vide proposal form dated June 30^th, 2012, Exhibit R-2.  The Complainant-respondent was nominee of the life assured. The assured died on November 14^th, 2012. The complainant, being the nominee of the deceased claimed the insured amount. The Birla Sun Life repudiated claim vide Repudiation Letter dated March 31^st, 2013 (Exhibit R-6) on the ground that the assured had history of lump in Left Parotid region and had undergone Paratidectomy much prior to her application for Insurance but she had concealed the said fact in the proposal form (Exhibit R-2) at the time of obtaining the policy. Aggrieved thereof, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986.

3.      The Birla Sun Life-appellants-opposite parties contested the complaint by filing reply taking ground stated in the repudiation letter. It was stated that the life assured was having old history of surgery and was suffering from total paratidectomy for lump in left parotid region and had undergone a surgery on 07.08.2011 in Sardar Patel Medical College, PBM Hospital, Bikaner, prior to her purchase of policy, where she was admitted on 01.03.2011 and was discharged on 14.03.2011. But this aspect was concealed in the proposal form at the time of obtaining the policy.

4.      On appraisal of the pleadings of the parties and the evidence available on the record, the District Forum allowed complaint and issued direction to Birla Sun Life as under:-

“………we allow the present complaint directing the Ops to pay a sum of Rs.15 lacs to the complainant with interest @ 6% per annum from the date of filing of the complaint till realization of the amount within one month. The Ops are further directed to pay a sum of Rs.5,000/- as litigation expenses, harassment and mental agony etc order be complied within one month failing which the complainant is at liberty to initiate proceeding against the Ops under Section 25/27 of the CP Act.”

5.      The question for consideration before this Commission is as to whether the life assured concealed her illness suffered by her prior to the date of obtaining the Insurance Policy and that the Birla Sun Life was justified in repudiating complainant’s claim?

6.      To decide the issue involved, the proposal form (Exhibit R-2), which was submitted by the life assured duly signed by her, for obtaining the policy is an important document. In Exhibit R-2 against Question No.11 (B)(C) and (E), the answers given by the life assured are as under:-

“B.     In the past five years, have you ever undergone any surgical operation at a hospital or clinic or undergone any investigations with other than normal or negative results (including X-rays,
ECG, blood tests, biopsies etc)?

C)      i.        Are you on diet or any other medicine of any kind as prescribed by a doctor?

          ii.       Are you currently undergoing or intend to undergo any treatment?

          iii.      Have you been advised for any surgical operation, procedure or hospital admission?

D)      xxx

E)      Have you ever been diagnosed with or treated/consulted for diabetes or sugar in urine, high or low blood pressure, chest pain, heart attack or any other heart disease, stroke, paralysis, kidney, urinary or bladder disorders, reproductive organ or prostate disorders, mental disorder, neurological disease, musculoskeletal disorders, cancer or tumour of any type, gastro-intestinal, liver disease, tuberculosis, asthma or any other lung diseases, blood disorders, anemia, endocrine or thyroid disorders?

The answers given to the above questions were in negative.

7.      During the course of hearing, Shri S.C. Thatai, learned counsel for the Birla Sun Life-appellants referred to the treatment record of the deceased from S.M.S. Medical College & Hospital, Jaipur and the report Exhibit R-3 of ‘Mack Insurance Auxiliary Services Pvt. Ltd. from which it is established that she was admitted in the above said hospital on 01.03.2011 and was discharged on 14.03.2011. She was suffering from Left Parotid Swelling and total parotidectomy was done and the histopathology report was awaited. She underwent MRI Brain on 22.07.2012, having impression of:

“This is a known Post operative case of parotid malignancy. Present study reveals evidence of a large lobulated enhancing sellar mass lesion with supra and parasellar extensions causing slight splaying of optic chaism and encasement of both ICA’s. this clearly shows that she was suffering from Parotid Malignancy before the inception of the policy (i.e. 30.06.2012).”

8.      In view of the above evidence it is established that the life assured was suffering from cancer prior to the date of obtaining the policy but she concealed this aspect in the proposal form at the time of taking the policy.

9.      It is well settled principle of law that if the policy was obtained by the life assured on mis-statement and by concealment of true fact regarding his/her health, the insurer is not liable to pay any insurable benefits.  

10.    Hon’ble Supreme Court in Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, 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………….”

11.    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.  ………..”

12.    Hon’ble Apex Court in P.C. Chacko v. Chairman LIC of India, (2008) 1 Supreme Court Cases 321, held as under:-

“22.   We are not unmindful of the fact that Life Insurance Corporation being a State within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reason of an act of the insured. This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the court carry the bargaining powers of the contracting parties. It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/proposal form, the respondents had acted unjustifiably or the conditions imposed are unconstitutional.”

13.    In CROWN CONSULTANTS PVT. LTD. Versus ORIENTAL INSURANCE COMPANY LTD., III(2011) CPJ 439 (NC), Hon’ble National Commission held as under:-

“19.     A contract of insurance is based on the doctrine of uberrima fides, i.e., “utmost good faith”, in the conduct of the insured. This doctrine was enunciated as far back as in 1766 by Lord Mansfield in the celebrated case of Carter V. Boehm, (1766) 97ER 1162, 1164, in the following words:

“Insurance is a contract of speculation….The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist….Good faith forbids either party for concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.”

14.    Hon’ble Supreme Court in BHS Industries versus Export Credit Guarantee Corp.& anr., III(2015) CPJ 1 (SC) held that the insurance policy has to be strictly construed and it has to be read as a whole and nothing should be added or subtracted.

15.    The authorities cited above, are fully applicable to the instant case. The evidence produced by the appellants-opposite parties proved that the life assured was suffering from cancer before the date of obtaining the policy for which she was under treatment but she concealed the same in the proposal form. Thus, the Birla Sun Life-appellants, rightly repudiated complainant’s claim. District Forum fell in error in allowing the complaint without appreciating the evidence of the parties. Therefore, the impugned order cannot sustain.

16.    Accordingly, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

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

 

Announced 14.09.2015

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President

CL