STATE CONSUMER DISPUTE REDRESSAL COMMISSION

BIHAR, PATNA

Appeal No. 70 of 2020

1. Tata A.I.G Life Insurance Co. Ltd, having its Registered & Corporate Office at 14^th Floor, Tower-A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai- Pin-400013

2. The Branch Manager, Tata A.I.G Life Insurance Company Ltd, Muzaffarpur Branch, District- Muzaffarpur

                                                                                                                                                                              … Appellants

Versus

Savita Singh, W/o- Late Anil Kumar Singh, Resident of Vill- Marhowrah, PO & PS- Marhowrah, District- Saran, at present residing at 133, Gola Bandh Road, Nazirpur, Town- Muzaffarpur, PO- Muzaffarpur, PS- Town, District- Muzaffarpur  

                                                                                                                                                                             …. Respondent

Counsel for the Appellant: Adv. Abhay Kumar Sinha

Counsel for the Respondent: Adv. Krishna Bihari & Adv. Rajendra Kumar Dubey

Before,

Hon’ble Mr. Justice Sanjay Kumar, President

Mr. Ram Prawesh Das, Member

Dated 04.07.2023

As per Sanjay Kumar, President.

O r d e r

1. Present appeal has been filed on behalf of appellant/opposite party Tata AIG Life Insurance Co. Ltd. for setting aside the judgment and order dated 18.10.2019 passed by Ld. District Consumer Forum, Muzaffarpur in Consumer Complaint case no. 48 of 2010 whereby and whereunder appellants have been directed to pay Rs. 10,00,000/- for treatment of  critical illness, Rs. 1,50,000/- as sum assured amount on death of insured and Rs. 20,000/- as compensation for physical and mental harassment within two months from the date of receipt of copy of the order failing which the appellant/company will be liable to pay interest @8% p.a till realization of the amount.
2. Briefly stated the facts of the case is that husband of the appellant namely Anil Kumar Singh had purchased an insurance policy for which he submitted a proposal form on 13.03.2008 for issuance of life insurance policy under “Tata AIG Life health Protector-5 years guaranteed Renewal Accident and Health Plan” for the sum assured of Rs. 10,00,000/- for critical illness benefit and Rs. 1,50,000/- for death benefit for which first annual premium of Rs. 10,333/- was paid on 13.03.2008 and second premium of Rs. 9,967/- was paid on 25.03.2009 and policy bond was issued on 27.03.2008.
3. The proposal form contained questions pertaining to the health and medical history of the proposer and required specific disclosure under question no. 2 of step 5, question no. 1 (b) of step 6 and question no. 6 of step 8 of the proposal application which were answered in negative by the insured. The answers to question given by insured were as follows:

(i). Do you currently have any Medical condition or symptom or taking any Medication or have consulted a Doctor for any Diagnostic Tests or any conditions other than cold, influenza, or employment related examination during the last 5 years. ….. NO

(ii). Have you had any of the following:

Stroke, anaemia, chest pain, raised cholesterol, heart disease, High or Low Blood Pressure, Kidney disorder?..... NO

(iii). Have you consulted a Doctor or any other Medical Facilities for investigation or Diagnostic Test (such as X-Ray, Ultrasound, CT Scan, Biopsy, ECG, OR Urine Test) in the last five years…. NO

4. Based on information provided in the proposal form and after receipt of the premium amount the appellant/insurance company issued policy bearing no. C012934737 with date of commencement of policy on 13.03.2008. As per appellant Policy issued to the insured comes in the NMG category where the insured is not required to undergo medical examination before issuance of the insurance policy. However, as per complainant insured was subjected to Medical examination.
5. Insured Anil Kumar Singh complained of pain in back and bleeding from urine on 16.06.2009 and was rushed to Prashant Memorial Hospital at Juranchapra, Muzaffapur and on examination and seeing the condition of insured he was referred to All India Institute of Medical Sciences, New Delhi. Insured was taken Lucknow on 19.06.2009 and was admitted in SGPGI where he was diagnosed to be suffering from kidney ailment and  insured needed kidney transplant.
6. Appellant/insurance company received critical illness claim intimation on 30.09.2009 by the complainant for monetory support under the critical illness benefit and documents such as hospitalization, claim form, claimant statement certificate of medical attendance and diagnosis document were sent to the insurance company on 29.09.2009 upon which representative of the insurance company visited hospital at Lucknow and made enquiries. Insured was kept on dialysis during which insured developed hepatitis B and died on 13.11.2009 during treatment at SGPGI, Lucknow.
7. Appellant /Insurance company received claim form  dated 03.12.2009 from complainant for payment critical illness benefit, death claim benefit amounting to Rs. 11,50,000/- however, by letter dated 24.02.2010 the insurance company repudiated the claim of complainant on the ground of suppression and concealment of material fact at the time of submitting proposal form, against which complainant filed the consumer complaint case for payment of Rs. 10,00,000/- for expenses borne in treatment of critical illness, Rs. 1,50,000/- as death benefit along with compensation for physical and mental harassment and cost of litigation.
8. Complainant had earlier filed a complaint case which was allowed exparte on 23.08.2013, aggrieved by which appellant/insurance company filed appeal before the State Commission Patna being Appeal no. 111 of 2014 and by order dated 25.01.2016 State Commission, Patna set aside the order dated 23.08.2013 and remanded the matter to the District Forum to hear the complaint case afresh after granting opportunity of hearing to both the parties.
9. Appellant appeared and filed written statement on 11.10.2010 stating therein that they had issued the policy in favour of insured in which complainant was nominee, however, policy holder had suppressed his pre-existing disease regarding suffering from acute kidney disease at the time of submission of proposal form. They had obtained discharge summary from Prashant Memorial charitable hospital as well as hospital records and discharge summary from SGPGI, Lucknow in which it was found that diseased was suffering from acute kidney disease for last three years and cause of death was polycyspic kidney failure and as such there was concealment and suppression of material fact as policy holder had not disclosed that he was suffering from acute kidney disease at the time of submission of proposal form and accordingly the claim of complainant was repudiated.
10. The District Consumer Forum after hearing both the parties and considering the material available on record held that the burden of proof regarding false representation and suppression of material fact lies on the appellant/insurance company but there is no evidence on affidavit of any doctor and any other relevant document to substantiate the allegations. Only photo copy of discharge sheet/slip of SGPGI, Lucknow with respect to insured and photo copy of prescription report of Sanjeevani Health Care have been filed that insured was suffering from acute kidney disease for last three years.
11. Insured was medically examined at the time of issuance of insurance policy and subsequent to medical test and medical assessment of insured and insurance company  being duly satisfied with the health condition issued the insurance policy.
12. The District Consumer Forum has further held that no test no prescription of any doctor has been filed to prove that insured was suffering from kidney disease at the time of submission of proposal form and accordingly held that insurance company had wrongly repudiated the claim and allowed the compliant case of complainant, aggrieved by which present appeal has been filed on behalf of insurance company.
13. It is submitted on behalf of counsel for the appellant that insured was suffering from severe kidney disease and autosomal dominant polycystic kidney disease (ADPKD) since last three years before his death which was confirmed by medical documents of different hospitals at Muzaffarpur and Lucknow where the insured had undergone treatment for the said disease where the insured had voluntarily disclosed his past history of suffering from ADPKD and haematuria since last three years and insured died on 30.11.2009 during treatment at SGPIMS, Lucknow and cause of death is also ADPKD.
14. Insured had deliberately and fraudulently concealed and suppressed the material fact of pre-existing disease of chronic kidney ailment as such repudiation of claim by letter dated 24.02.2010 was justified and same was also confirmed by letter dated 30.04.2010 of Grievance Redressal Committee.
15. On the other hand counsel for the respondent has supported the order passed by the District Consumer Forum and stated that insured was not suffering from any kidney disease at the time of submitting the proposal form and insured was subjected to medical examination by empanelled doctors of insurance company and had insured been suffering from any kidney disease, it would have reflected in medical examination report.
16. Heard counsel for the parties.
17. Basic issue in this appeal relates to non disclosure of pre-existing disease by the insured at the time of submission of proposal form which led to repudiation of claim by complainant.
18. Contract of insurance is based upon principle of Uberrimae fider which means that the proposer is bound to disclose all relevant facts within his knowledge including his pre-existing diseases. These information are required by the insurance company to arrive at a decision based on actuarial risk i.e whether coverage is to be granted or not and if to be granted on what terms and conditions.
19. As per section 45 of the Insurance Act, 1938, insurer would be justified in repudiating the claim within two years of commencement of policy for non-disclosure of material fact. Insured must disclose to the insurer all material fact for appraisal of the risk which are known to the insured but not known to insurer. Any fact which would influence the judgment of a prudent insurer is a material fact.
20. Insured was admitted in Sanjeevani Health care, Muzaffarpur on 11.06.2009 in which attending doctor has recorded in the history of disease of insured to be suffering from chronic kidney disease for last three years. Insured was thereafter shifted to Prashant Memorial Charitable Hospital, Muzaffarpur on 16.06.2009 and was discharged on 18.06.2009 and attending doctor recorded provisional diagnosis as advanced renal failure, polycystic kidney disease, haematuria and was further referred to AIIMS, New Delhi.
21. Insured was admitted in Sanjay Gandhi Post Graduate Institute of Medical sciences on 19.06.2009 and attending doctor recorded in the history of disease of insured as suffering from ADPKD for three years and same is reflected in the discharge summary also.
22.  The National Commission in case of Vidya Devi etc Vs. LIC of India since reported in 2003 (2) CPJ (NC) has held that recording of history of diseases by the attending doctor is admissible as same has been recorded on the disclosure made by the insured before the doctor. The relevant paragraph no. 3 is reproduced below:
3. “Certainly the doctor who recorded the nature of disease of Chawla at the time of admission could not have thought of all these illness with which Chawla suffered unless he himself told the same to the doctor at the time of his admission. These illnesses are as such which Chawla would not have started suffering only from the date of his first policy. He was suffering from much early period. Admittedly, Chawla did not disclose these illnesses when he took the two policies. LIC, in our opinion, rightly repudiated these policies. We uphold the order of the State Commission and dismiss these revision petitions”.
23.  Similar view has been expressed by the National Commission in case of LIC of India Vs. Geeta Devi since reported in 2016 (4) CPJ (NC) 264 paragraph no. 11 of which reads as follows:
11. “The main issue that merits consideration in the present case relates to the alleged suppression of material facts by the deceased husband of the complainant at the time of seeking revival of the three policies in question, obtained by him from the LIC. The petitioner LIC has contended that based on the information contained in the documents, maintained by the Hospital, where the deceased was admitted on 03.06.2003, it was amply clear that the deceased was suffering the disease, of AIDS for the last one year. It was evident therefore, that he did not provide the said information to the LIC at the time of revival of the policies and the said revival had been done only 5 to 6 months, before his death. The Consumer Forum below in the orders passed by them have taken the plea that it’s the duty of the LIC to prove that the deceased was in the knowledge of his disease at the time of revival of the policies. However, it is made out from the material produced on record by the LIC, that they provided the relevant medical record from the concerned hospital, in which it has been clearly recorded that the deceased was suffering from AIDS for the last one year at the time his admission in the said hospital. The hospital has recorded that the said information was provided to them by a relative of the deceased. The name of such relative has not been mentioned in the record, but it was the duty of the complainant to disclose the name of such relative and to produce him in evidence before the Consumer Fora, if the information given by him to the hospital was not true. The LIC have discharged the initial onus of proof has evidently shifted to the complainant and it was her duty to produce the necessary evidence, if she believed that the information contained in the record was not true. From the material on record, it is quite apparent that no effort has been made by the complainant to file any such evidence on record”.
24. The Supreme Court in case of Branch Manager, Bajaj Allianz Life Insurance Company Ltd. Vs. Dalbir Kaur has upheld the repudiation of claim relying upon medical records obtained during investigation paragraph no.  6 & 13 of which reads as follows:
6. “Mr. Amol Chitale, learned counsel appearing on behalf of the appellants states that the judgment of the consumer fora  in the present case are contrary to the law which has been laid down by this Court in Life Insurance Corporation of India vs Asha Goel, (2001) 2 SCC 160 P.C. Chako vs Chairman, Life Insurance Corporation of India, (2008) 1 SCC 321 and Satwant Kaur Sandhu vs New India Assurance Company Limited, (2009) 8 SCC 316. Learned counsel submitted that a policy of insurance is governed by the principles of utmost good faith. In the present case, the investigation reports revealed that proximate to the date of death, the deceased had been hospitalized in July 2014 with a complaint of having vomited blood and a non-disclosure of the material facts would justify the repudiation of the claim by the insurer. It was urged that the proposer was duty bond to make a full disclosure in response to the queries in the proposal forum which he failed to do. The suppression of Material facts by the insured entitles that appellants to repudiate the policy under Section 45 of the Insurance Act, 1938. Section 45 stipulates that an insurer is restricted from calling into question a life insurance policy after an expiry of two years from the date on which it was effected on the ground that a false or inaccurate statement has been made in the (i) proposal; (ii) report of medical officer, referee or a friend of the insured; or (iii) in any other document leading to the issue of policy. On the expiry of two years, the burden of proof shifts to the insurer who has to establish that the false or inaccurate statement was Material matter or related to Material facts. In the present case, the claim in question was repudiated within two years from the commencement of the policy”

                          13.  “The medical records which have been obtained during the course of the investigation clearly indicate that the deceased was suffering from a serious pre-existing medical condition which was not disclosed to the insurer. In fact, the deceased was hospitalized to undergo treatment for such condition in proximity to the date of his death, which was also not disclosed in spite of the specific queries relating to any ailment, hospitalization or treatment undergone by the proposer in Column 22 of the policy proposal form. We are therefore, of the view that the judgment of the NCDRC in the present case does not lay down the correct principle of law and would have to be set aside. We order accordingly”.

25.  In investigation conducted by investigator appointed by insurance company the medical records with respect to treatment of insured was obtained where insured was admitted for treatment, from which it is explicit that insured was suffering from chronic kidney disease at the time of submission of proposal form in which he suppressed and concealed the material fact of his suffering from chronic kidney disease.
26. Complainant herself has admitted that insured was admitted in said hospitals for treatment which included SGPIMS, Lucknow which is one of the most reputed and prestigious govt. hospital for treatment of kidney disease and insured himself disclosed before the attending doctor of his suffering from kidney disease for last three years and doctor recommended for kidney transplant but unfortunately insured died during treatment while was on dialysis. The complainant herself has admitted that cause of death of insured was polycystic kidney failure and investigation revealed that he was suffering from said disease for last three years and as such there was suppression and concealment of material fact by the insured while filling and submitting the proposal form as such repudiation of claim by insurance company on said ground can not be faulted.
27. Complainant has stated that prior to issuance  insurance policy insured was medically examined whereas, contention of insurance company is that policy issued to the insured was in the NMG category where the insured is not required to undergo medical examination.  The National Commission in case of LIC of India Vs. Rajesh Kumar since reported in 2020 (4) CPJ (NC) 229 in paragraph no. 12 has held as follows:
12. “The learned Counsel for the complainant submitted that the insured was duly examined by the doctor on the panel of the Corporation and was found fit and fine. This, however, would not be material since it may not be possible for the doctor to detect all the ailments on the basis of the clinical examinations and the tests conducted at that time. It is bounded duty of the insured to disclose the relevant information with respect to the state of her health and truthfully answer the question he/she is required to answer in the proposal form”.
28. For the reasons as stated above the judgment and order dated 18.10.2019 passed by Ld. District Consumer Forum, Muzaffarpur in Consumer Complaint case no. 48 of 2010 is not sustainable either in law or on facts and is accordingly set aside.
29. Appeal is allowed and complaint case no. 48 of 2010 filed before District consumer Forum, Muzaffarpur is dismissed.

(Ram Prawesh Das)                                                                                                             (Sanjay Kumar,J)

       Member                                                                                                                               President

Md. Fariduzzama