Haryana

StateCommission

A/1445/2017

MAX LIFE INSURANCE CO.LTD. - Complainant(s)

Versus

REKHA GOEL - Opp.Party(s)

M.L. SINGHI

04 Oct 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :         1445 of 2017

Date of Institution:           29.11.2017

Date of Decision :            04.10.2018

 

1.      Max Life Insurance Company Limited, Operation Centre, Sector 16, Faridabad-121001.

2.      Max Life Insurance Company Limited, Branch Office, Faridabad, Sector 16, Faridabad-121001 through its MD/Manager.

                                      Appellants-Opposite Parties

Versus

 

Rekha Goel wife  of Shri Ashwani Kumar Goel, resident of House No.1696, Jawahar Colony, NIT, Faridabad, Haryana.

                                      Respondent-Complainant

 

 

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

                             Shri Balbir Singh, Judicial Member.

                                                                                                         

 

Present:               Shri Nitesh Singhi, Advocate for appellants.

                             Shri Kunal Dawar and Shri Rohit Rana, Advocates for respondent. 

 

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

          By filing this appeal, Max Life Insurance Company Limited and its functionary-opposite parties (for short ‘Insurance Company’) has challenged the order dated July 25^th, 2017 passed by District Consumer Disputes Redressal Forum, Faridabad (for short ‘District Forum’), whereby it directed the Insurance Company to pay Rs.5,60,522/- alongwith interest at the rate of 9% per annum from the date of filing of the present complaint till realization; Rs.10,000/- compensation and Rs.2100/- litigation expenses to Rekha Goel-complainant on account of death of her husband Ashwani Kumar Goel (life assured).

2.      Sh. Ashwani Kumar Goel (since deceased) husband of complainant purchased insurance policy dated August 30^th, 2010 for Rs.5,60,522/- from the Insurance Company. The life assured expired on November 10^th, 2012 at Sir Ganga Ram Hospital, New Delhi during his treatment. The complainant submitted claim with the Insurance Company but it was repudiated vide letter dated December 30^th, 2012 (Exhibit C-7) on the ground that prior to the signing of the proposal form, the life assured was suffering from CRF, B/L Small kidney, ESRD (End Stage Renal Disease), Hypertension since 2005. He did not disclose this fact in the proposal form.  He answered question No.3 xi) as under:-

3.	Are you now or have you ever been diagnosed with any of the following conditions.  If yes, please provide details or attach relevant documents.
xi.	Any kidney or bladder disorder, stones or prostate disorder	No

 

3.      Per medical record (Annexure A-2), the life assured admitted in Patel Hospital Private Limited, Jalandhar on August 06^th, 2006 on account of kidney transplant.  He also took treatment from Fortis Escorts Hospital, Faridabad, AIIMS Hospital, Delhi, Indraprastha Apollo Hospital, Delhi from 2005 to 2007.  He purchased the policy on August 30^th, 2010.  He did not disclose all these facts to the Insurance Company while obtaining the insurance policy.  From this overwhelming evidence on record, it is proved that the state of health of the person insured was not good prior to the purchase of the policy.   He suppressed this fact from the Insurance Company.

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

5.      Hon’ble Apex Court 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.  ………..”

6.      In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

7.      For the reasons recorded supra and the law enunciated above, it is held that the Insurance Company was justified in repudiating complainant’s claim. Thus, the District Forum fell in error in allowing the complaint and as such the impugned order cannot be allowed to sustain. The appeal is accepted, the impugned order is set aside and the complaint is dismissed.

8.      The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification, in accordance with the rules.

 

 

Announced: 04.10.2018

(Balbir Singh) Judicial Member

(Nawab Singh) President