This Revision Petition has been filed against the impugned Order dated 03.02.2020 passed by the Ld. State Consumer Disputes Redressal Commission, Delhi in First Appeal No. 284/2017 vide which, the Appeal filed by the Petitioner was dismissed, and the Order of the Ld. District Forum was affirmed.

2. The factual background, in brief, is that the Complainant’s husband took two life insurance Policies from the Petitioner/Opposite Party to ensure financial provision for the marriage of his daughters, appointing them as his nominees under the Policies. At the time of canvassing for the Insurance Policies, whatever questions were asked by the Agent were fully and correctly answered by the Complainant’s husband, which were noted by the Agents on a blank paper. However, the Agent insisted on signing the blank Proposal Forms for the Policies, stating that due to the year-end rush period, he could not complete everything on the spot andwould fill in the Forms later based on the provided information.

 Subsequently, a full medical examination was conducted on the Complainant’s husband by a Senior Medical Examiner of the Opposite Party at his Clinic, and only on the basis of this report, the proposals for the Policies accepted and the Policies issued. Unfortunately, on 22.10.2001, the Complainant’s husband passed away due to acute abdominal pain at the age of just 33 years, leaving behind his two daughters. The Complainant, being the Nominee for her minor daughters, informed the Petitioner about the death and claimed the insured amount by sending all the requisite documents for processing the Claim. However, to the Complainant’s utter shock, after about 3 years from the date of submission of Claim papers, she received a repudiation letter on 09.06.2004. The repudiation was based on the allegation of suppression of material facts, specifically that her husband was suffering from chronic alcoholism, which was the direct cause of death. Aggrieved by the wrongful repudiation by the Petitioner, the Complainant filed her Complaint before the Ld. District Forum (West), Delhi.

3. The District Forum vide its Order dated 23.03.2017 allowed the Complaint and directed the Petitioner to pay the Complainant the sum assured amount of Rs. 2,00,000/-of both the Policies with interest @9% p.a from 11.11.2001 till the date of realization along with Rs. 50,000/- towards mental agony. The Petitioner then filed Appeal before the Ld. State Commission, which dismissed the same and upheld the Order of the District Forum. The relevant extracts of the impugned Order are set out as below -

“12. I have gone through the material on record and heard the arguments. Firstly, there is delay of 20 days in filing the appeal for which application for condonation of delay has been moved. The plea of the appellant is that Divisional Officer sent copy of order to Manager (L& HPF) for getting information. The legal department opined in favour of filing appeal after which it was directed to file an appeal. On 11.05.2017 the counsel was given papers to file appeal. On 22.05.2017 counsel prepared the draft of the appeal, sent it to appellant for vetting. For the reasons mentioned in the application, the delay is condoned.

13. On merits counsel for appellant drew my attention towards history sheet of Sir Ganga Ram Hospital which at page-73. The same shows that Sh. Prem Prakash Aggarwal, 33 years male was non diabetic, chronic alcoholic who complained of pain in abdominal and recurrent vomiting for two days. CT scan of abdominal reveals AC pancreatitis, extension changes. On the basis of this OPs wanted me to hold that deceased was habitual drinker. I am unable to agree. It was so, medical officer of appellant should have reported the same at the time of examination before issuance of policies. Medical examination was done hardly eight month before death.

14. Moreover, initially the appellant informed the respondent that polices were under "Marriage" plan and assured sum would be payable after expiry of period of policy in the year 2021 when both the nominees will be of marriageable age. It is not clear as to what made OP to change its mind after two years for repudiation of the claim. Thus, repudiation cannot be explained on any hypothesis other than that of malafide.

15. Repudiation is in violation Regulation 8(3) of IRDA 2002. Repudiation could be made at the most within six months from the date of filing claim. As has been held by State Commission Punjab, State Commission of West Bengal in the case referred to supra, non repudiation within the period six months is per-se sufficient to show the deficiency in service. I do not find any infirmity in the impugned order. The appeal fails and is dismissed.”

4.      Ld. Counsel for Petitioner/Opposite Party has argued that that the State Commission has erroneously held in Para 13 of the impugned Order that the Medical Officer of LIC should have reported that the Life Assured was a chronic alcoholic during the examination before issuing the Policies. The lower Fora failed to appreciate that even if the Insurer’s Doctor finds no disease or ailment during a routine examination, the Proposer is still required to disclose all material facts within his knowledge and this examination is based on the information provided by the Proposer  in  the  Proposal Form. Reliance is placed on decisions of this Commission in “Sr. Manager, LIC of India v. Rajesh Kumar, MANU/CF/0482/2020” and “LIC v. Chahaya Hanmayya Ghante, RP/991/2010” in which it was held that a medical examination by an LIC panel Doctor before issuing a Policy is a routine check, and not meant to detect every possible disease; That in the present case, the DLA died within 6 to 7 months of taking the Policy, and as per Section 45 of the Insurance Act, the Policy can be questioned on grounds of suppression and concealment if the Life Assured dies within 2 years from the Policy date; That the DLA suppressed material facts and provided incorrect information about his health in the Proposal Forms dated 04.02.2001 and 19.03.2001, concealing that he was suffering from Alcoholic necrotizing pancreatitis, Septicaemia C, multiple organ failure, and that he was a chronic alcoholic, as evidenced by medical records; That the lower Fora failed to recognize that the Contract of Insurance is governed by the legal doctrine of ‘uberrima fides’, meaning every material fact must be disclosed in utmost good faith, and the DLA violated this principle, leading to the issuance of the Policy based on incorrect information; That the Petitioner rightfully repudiated the Claim within 30 days of receiving all the requisite documents due to the suppression of material facts, in accordance with Regulation 8(3) of the IRDA (Protection of Policyholders Interests) Regulations, 2002; That the lower Fora incorrectly directed the Petitioner to pay the sum assured within 30 days of the Order’s receipt, because according to the Policy terms, the sum assured becomes due on its maturity date, and not upon the death of the Proposer/Life Assured; That the lower Fora also erred in awarding interest at 9% p.a. from 11.11.2001, i.e. the date of Claim Form submission, until realization, as the assured sum was not due for payment until the Policy’s maturity dates on 28.02.2021 and 28.03.2021 respectively, and no interest is applicable for payments not yet due.

5.      This Commission has heard both the Ld. Counsel for Petitioner and Respondent, and perused the material available on record.

6.           Ld. Counsel for the Petitioner has drawn attention to the Treatment record of the deceased Life Assured maintained in Sir Ganga Ram Hospital, New Delhi, to which he was referred on 22.9.2001 from Muni Mayaram Jain Hospital, New Delhi for further management, as his condition was critical.  It has been noted in the said History Sheet, “This 30 years old male non-diabetic…………(illegible word) Ch. Alcoholic presented”, to emphasize that the deceased was addicted to taking alcohol.  Consequently, his answer to Question No. 11(h) of the Proposal Form signed by him for the purpose of obtaining the Insurance Policy on 19.3.2001, ”Do you use or have you ever used?(i) Alcoholic drinks” as       “No” was clearly false.

7.      Ld. Counsel for the Petitioner has also assailed the observation of the Ld. State Counsel in dismissing the Complaint on the additional ground that the Petitioner had acted in violation of Regulation 8(3) of the IRDA Regulations, 2002, in repudiating the Claim, since such repudiation could have been done at the most within six months from the date of filing such Claim.  In this regard, it is seen that the aforesaid Regulation had come into operation w.e.f. 1.10.2002, whereas the Claim Application had been submitted much prior to that in the year 2001 itself, on account of which the newly enacted Regulations did not cover the same. In any event, after having received the Claim/intimation of death on 19.11.2001, the Insurance Company asked the Claimants vide their letter dated 19.1.2002 followed by reminders dated 14.6.2003 and thereafter as late as on 28.4.2004 to provide the relevant treatment records/details pertaining to the deceased Life Assured, which were finally provided on 8.5.2004, after which the Claim was repudiated within 14 days thereafter on 22.5.2004.

8.      It is also clear from the own averment in Para 7 of the Complaint that the deceased was a Law Graduate and had worked as an Advocate for some time in the Tis Hazari Courts Delhi before shifting to the profession of Property Dealership which he found was a more lucrative one.  Again in Para 12 of the Complaint, it was averred that the deceased had been befriended by some of the other Property Dealers who were jealous of him and started regularly inviting him to parties where he was “coaxed and compelled to take hard drinks by his hosts”.  In such a background, it is difficult to give any credence to the claim that the answers in the Proposal Form had been filled up by the Agent of the Insurance Company, and the deceased had signed upon the Form while it was in a blank condition, since such a conduct is not at all expected from a person who is a qualified Advocate, and also a successful Property Dealer.

9.      In its recent decision in “Reliance Life Insurance Co. Ltd. and Anr. v. Rekhaben Nareshbhai Rathod, Civil Appeal No. 4261 of 2019”, the Hon’ble Apex Court did not give any credence to such submissions that repudiation of an Insurance claim by not disclosing about existence of any previous Insurance Policy on the ground that the Insured had signed upon the Proposal Form without being aware of its contents was not justified.  The relevant detailed observations of the Hon’ble Apex Court in the aforesaid decision are set out as below –

29. We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. Barely two months before the contract of insurance was entered into with the Appellant, the insured had obtained another insurance cover for his life in the sum of Rs. 11 lakhs. We are of the view that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitled the insurer to repudiate the claim under the policy.

30. We may note at this stage, that the view which was taken by the NCDRC in the present case was contrary to its earlier decision in Vidya Devi (supra). In that case, the NCDRC upheld the repudiation of an insurance claim under a life insurance cover by the LIC on the ground of a non-disclosure of previous insurance policies. In taking this view, the NCDRC relied on its earlier decision in Chandarana (supra). Subsequently in Sahara India (supra), the NCDRC took a contrary view. Having noticed its earlier decisions, the NCDRC did not even attempt to distinguish them. Indeed, the earlier decisions were binding on the NCDRC. This line of approach on the part of the NCDRC must be disapproved.

31. Finally, the argument of the Respondent that the signatures of the assured on the form were taken without explaining the details cannot be accepted. A similar argument was correctly rejected in a decision of a Division Bench of the Mysore High Court in VK Srinivasa Setty v. Messers Premier Life and General Insurance Co. Ltd. MANU/KA/0032/1958 : AIR 1958 Mys 53 where it was held:

Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understating it. The is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form.

If an agent nevertheless does that, he becomes merely the amanuensis of the insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer. Further, apart from any question of imputed knowledge, the insured by signing that proposal adopts those answers and makes them his own and that would clearly be so, whether the insured signed the proposal without reading or understanding it, it being irrelevant to consider how the inaccuracy arose if he has contracted, as the Plaintiff has done in this case that his written answers shall be accurate.”

(Emphasis added)

10.    In view of the aforesaid decision of the Hon’ble Supreme Court, and the observations put on record in Para No. 9  above to the effect that the defence of having signed on blank Proposal Forms was altogether unacceptable in case of an educated person who was also a qualified Advocate, this Commission is of the view that the Insurance Company was justified in repudiating the Insurance Claim on the ground of wilful suppression of material facts by way of having given incorrect answers in the Proposal Form regarding the health condition or consumption of alcohol by the deceased Proposer.  Both the Ld. Fora below had therefore acted erroneously in allowing the Complaint, and in ignoring the fact that the principle of ‘uberrima fides’ i.e. supply of information in utmost good faith by the Proposer had not been followed.

11.    For the aforesaid reasons, the Revision Petition is allowed after setting aside the impugned Orders of both the Ld. Fora below. The Complaint of the Respondent accordingly stands dismissed.

12.    Parties to bear their own costs.

13.    Pending application(s), if any, also stand disposed off as having been rendered infructuous.