This revision petition is directed against the judgment and order dated 09.10.2012 passed by the Haryana State Consumer Disputes Redressal Commission, Panchkula (‘the State Commission’) in First Appeal no. 834 of 2012, whereby the State Commission confirmed the order of the dismissal of the complaint of the petitioner passed by the District Consumer Disputes Redressal Forum, Karnal (‘the District Forum’).

2.         Briefly put facts relevant for disposal of this revision petition are that Sachin Mehta, late husband of the petitioner obtained a Life Insurance Policy worth Rs.15 lakh for a term of 25 years from the opposite parties on 23.10.2009. Shri Sachin Mehta unfortunately died on 26.02.2010. The complainant being a widow of insured submitted the insurance claim which was repudiated by the opposite parties vide letter dated 06.02.2010 on the ground that the life assured obtained insurance policy by suppressing material information that he already had life insurance policies worth Rs.37 lakh obtained from other insurance companies. Being aggrieved of the repudiation of the claim, the petitioner filed consumer complaint before the District Forum, Karnal.

3.         The District Forum, Karnal on appraisal of the pleadings and evidence adduced by the parties did not find any substance in the complaint and dismissed the complaint with the following observations:

“We find force in the arguments advanced by the OPs whereas those advance by the learned counsel for the complainant do not find favour with us. We have been told that the DLA was running a factory. He was an educated person. He had signed the proposal from Ex.O2. In it under head 6 details of other insurance policies taken by the DLA were to be given by the DLA. Beneath it, it was written

                           “No existing policy”.

   There is no dispute regarding the fact that during the above said period the DLA had got himself insured with several insurance companies. The reply given by the DLA regarding the above said heading no. 6 was patently wrong. We are of the view that the contract of life insurance is based on the principle of uberima fide (utmost good faith) on the part of the life assured. The DLA was required to dislose the details of all the past life policies which were obtained by him when he applied for the policy in question. All this was not done by the DLA. Since, the details of the other insurance policies was not given by the DLA, in the proposal form, the complainant firm was fully justified in repudiating the claim of the complainant. In support of this view, we draw support from the observations made in authority Dineshbhai Chandarana and Anr. Vs LIC CDJ 2010 (Cons.) Case no. 269 page 1 to 7 which has been referred to by the learned counsel for the OPs.

   As per the facts of the authority Life Insurance Corporation of India vs Shahida Begum (Smt) 2011 (3) CPC page 256, which has been referred to by the learned counsel for the complainant, the other policies were taken by the DLA from the same brank of the life insurance corporation. In that case it was held that it was the duty of the staff of the insurer to know about the earlier policies. It was not so in this case. Thus an authority Life Insurance Corporation’s case (Supra) was of no help to the complainant. We hold that from the material on record, it could not be said that there was any illegality in the repudiation letter Ex.O12 issued by the OPs. Thus, we held that there was no deficiency in service on the part of the OPs. Therefore, the present complaint is hereby dismissed.”

4.         Being aggrieved of the order of the District Forum, the petitioner approached the State Commission in appeal.  The State Commission, however, relying upon the law laid down by Hon’ble Supreme Court and the judgments of the National Commission dismissed the appeal.

5.         Learned counsel for the petitioner has contended that the orders of the foras below are not sustainable for the reason that both the foras below have failed to appreciate that there was no deliberate concealment of material fact on the part of the insured.  It is contended that actually agent of the respondent insurance company took it upon himself to fill up the proposal form and obtained signatures of the life assured on the blank form.  The relevant particulars which are being termed as misrepresentation of facts were filled in by the agent without the instructions of the insured.  It is also contended that even if it is assumed that the respondent was justified in repudiating the insurance claim, it was under obligation to refund the insurance premium and the failure of the insurance company on this count amounts to deficiency in service.

6.         Mr. Rakesh Malhotra, Advocate for the respondent on the contrary has argued in support of the impugned orders.  Learned counsel contended that from the information available in the proposal form, the life assured was running the business having annual income of Rs.2.25 lakh.  He was not a naïve person.  Therefore, it is improbable that he might have signed the blank proposal form at the instance of the insurance agent.

7.         I have considered the rival contentions and perused the material on record.  On consideration of the material available on record, I find no merit in the revision petition.  The petitioner has placed on record Annexture P-3,  a true extract of the relevant portion of Financial Under Writing Regulations w.e.f. 01.01.2007.  On perusal of these guidelines, I find that the guidelines put a restriction of maximum insurance allowable to a person based upon his age and the income.  As per the proposal form, the date of birth of life assured was 06.12.1972.  Thus, at the time of issue of insurance policy, the life assured was aged around 37 years.  As per the guidelines, in case of life assured in the age group of 31 to 40 years, the maximum insurance cover allowable to him would be 17 times of his average annual income.  The life assured has mentioned his average annual income in the proposal form as 2.25 lacs, meaning thereby that he could not have taken the insurance cover of more than  Rs.38,25,000/-.  It is not in dispute that at the time of taking the subject insurance policy, the life assured was having thee insurance policies with Kotak Life Insurance for total sum of Rs.9.00 lacs, two insurance policies of LIC for total sum of Rs.4.00 lacs, one insurance policy with Metlife for 20 lacs and 2 ICICI  Prudential Life Insurance Policy for total sum of Rs.4.00 lacs.  The sum total of those insurance policies amount to Rs.37.00 lacs.  Thus, had the life assured declared his previous insurance policies in his proposal form, the respondent insurance company in view of the aforesaid Financial Under-writing guidelines would not have accepted his proposal for providing him life insurance cover for 15.00 lacs.  On perusal of the proposal form, I find that in coloumn 6, wherein the applicant in the insurance policy is supposed to give details of the life insurance policies held or applied by the proposer, the life assured has mentioned ‘no existing policy’.  Thus, this is clear case of concealment of material information in the proposal form which would have impacted the decision of the respondent insurance company to accept or reject the proposal.

8.         The effect of mis-representation or suppression of material fact was considered by the Apex Court in the matter of P.C.Chacko & Another Vs. Chairman, Life Insurance Corporation of India and Others, (2008) 1 SCC 321 wherein Hon’ble Supreme Court discussed several other pronouncements observed thus:

“The purpose for taking a policy of insurance is not, in our opinion, very material.  It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated if a fraudulent act  is discovered.  The proposer must show that his intention was bonafide.  It must appear from the face of the record.  In a case of this nature it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy-holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose.  A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law.”

9.         In the matter of LIC of India v. Asha Goel, (2001) 2 SCC 160, Hon’ble Supreme Court highlighted that the contract of insurance are contracts uberrima fides and the assured is supposed to disclose every material fact.  The relevant observations of the Apex Court are reproduced thus:

“The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract.  The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance.  If there are any misstatements or suppression of material facts, the policy can be called into question.  For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could  not be ascertained by reasonable enquiry by a prudent person.”

10.       Similar view was taken by the Supreme Court in the matter of Satwant Kumar Sandhu Vs.  New India Assurance Company Limited, (2009) 8 SCC 316.  The relevant observations are reproduced as under:

“A mediclaim policy is a non-life insurance policy meant to assure the policy-holder in respect of certain expenses pertaining to injury, accidents or hospitalisations.  Nonetheles, it is contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured.  Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge.  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, the obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.  The obligation to disclose necessarily depends upon the knowledge one possesses.  His opinion of the materiality of that knowledge is of no moment”.

11.       In the light of the above settled legal position, judged from any angle, we find that the life assured made a deliberate mis-representation in the proposal form by giving a wrong information regarding his pre existing insurance policies in the following words “no existing policy”.  I  have already discussed that as per the relevant underwriting guidelines, the life assured could have taken insurance worth up to the maximum Rs.38,25,000/-.  Therefore, had he disclosed the fact that he was already having life insurance policies for a total sum of Rs.37.00 lacs with other insurance companies, the respondent insurance company would have not underwritten his proposal form for Rs.15.00 lacs as it would have crossed over and above the maximum limit of Rs37.00 lacs.  Thus, the order of the State Commission holding that the repudiation of the insurance claim does not amount to deficiency in service, cannot be faulted.

12.       In view of the discussion above, I do not find merit in the revision petition.  It is accordingly dismissed.

13.       It may be added that on hearing dated 21.02.2014, counsel for the respondent on instructions offer to refund the premium of Rs.68,211/- as ex gratia payment, which offer was not accepted by the petitioner.   Be that it may, the respondent is expected to honour the offer.