Delhi

North

CC/22/2021

BACHULI DEVI - Complainant(s)

Versus

SBI LIFE INSURANCE COMPANY LTD. - Opp.Party(s)

F.K. JHA, Deepak Kumar, Adhir Jha, Jagdish Kumar Drishti Malhotra,

03 Apr 2024

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

 

Consumer Complaint No.:22/2021

 

Ms. Bachuli Devi

W/o Late Jai Singh,

B-443, Block-B,

Delhi Administrative Flats,

Timarpur, Delhi-110054.                               …                         Complainant

 

                                                          Vs

 

SBI Life Insurance Company Ltd.

Within the premises of State  Bank of India,

Branch at ISBT,

Kashmere Gate, Delhi

Through its Branch Manager.                        …                    Opposite Party No.1

 

SBI Life Insurance Company Ltd.

112, 2^nd floor, SBI Building,

Dayanand Road, Opp. Golcha Cinema,

Daryaganj, Delhi-110002,

Through its Branch/ Chief Manager

/Authorized Officer                                      …                     Opposite Party No.2

 

SBI Life Insurance Company Ltd.,

B-201 A to B-201 G, 2^nd floor,

The Statesman House,

Barakhamba Road, New Delhi-110001

Through its Branch/ Chief Manager

/Authorized Officer                                      …                     Opposite Party No.3

                            

ORDER

03/04/2024

 

Ashwani Kumar Mehta, Member:

 

1.       The present complaint has been filed under Section 35 of the Consumer Protection Act, 2019. The brief details of facts, as alleged by the Complainant in the Complaint in hand, are that:-

 

1. Jai Singh husband of complainant was holder of SBI Life Insurance Policy No. 12536473710 dated 15.11.2018 for sum assured of Rs.5,00,000/-. He had paid required premium on time. The Complainant/ widow of Sh. Jai Singh is nominee of policy holder of Late Jai Singh. Agents of O.P. used to take signature of the complainant on dotted lines and do not either inform the consumer about their hidden unlawful interpretation of proposal or denial of claim in case of eventualities. The agents are only interested in receiving money from consumer at large to gain profit and to deny legitimate claim of the consumer at large for their unlawful enrichment.
2. Late Jai Singh, husband of complainant had been paying required instalment on time. His policy continued from 15.11.2018 onwards till he expired on 24.04.2019. He expired at Delhi Heart & Lung Institute-3 MM-II, Panchkuian Road, Delhi.
3. The complainant filed claim against the aforesaid policy before O.P. No.1. However, the O.P. No.1 had repudiated the claim and paid Rs.29,600/- only on the ground of non-disclosure of disease i.e. hypertension and stroke at proposal stage. A copy of claimant statement/Death Claim filed before O.P. No.1 by complainant is annexed as Annexure-C with the complaint.
4. Husband of complainant was also having another policy in the year 2011 vide Policy No.57001735507 dated 30.09.2011. He never had any disease to disclose in the year 2018, therefore there was no question of disclosing the same to the OP arises.

 

2.       It has been alleged that the O.P. No.1 had never asked husband of complainant for medical examination during 1 year of existence of life policy, which proves that there was presumption of acceptance of the proposal in favour of the deceased as the propos al form along with good health declaration form was accepted by the bank officials and sent to the insurance company and the premium was debited by the bank from his account. Neither the concerned officials of O.P. No.1 nor the deceased were intimated by them to appear for medical examination at any point of time during the existence of policy for about 1 year and also prior to the policy existed from 2011 onwards. The O.P. No.1 paid back premium of Rs.29,600/- only after complainant claimed for payment of insurance amount of Rs.5,00,000/-. There is no reason to believe that there was no complete contract or that the deceased concealed any disease from the officials of O.P. No.1.

 

3.       It has further been alleged that:-

“according to policy terms and conditions 3.2-

 "Death Benefit-3.2.1:-

“ If your policy is in-force on the date of death, we will pay the following benefits on death of the life assured:-

 Basic Sum Assured plus vested Bonus if any, plus Terminal Bonus, if any."

 

The complainant has been consistently representing O.P. No.1 for balance payment of Rs.4,70,400/- since 26.06.2019 but OP has to pay balance amount on one or other false ground of non-disclosure of disease. Ultimately complainant represented telephonically to the O.P. No.1 on 28.05.2020 for balance payment alongwith interest, mental pain, agony and harassment but the officials of O.P. No.1 have flatly refused to make payment as stated in reply dated 26.06.2019. The complainant has also made representation to the O.P. No.2 & 3 on 01.06.2020 and apprised them about the facts of the case but they also refused to settle the grievances of complainant. The reply dated 15.06.2020 of OP-1 of the representation dated 01.06.2020 has been filed with complaint.

 

4.       It has further been alleged that due to above conduct of the OPs, the complainant has undergone grave mental tension, undue hardship, pain and agony. Therefore, the complainant has sought compensation of Rs.50,000/- for the pain inflicted upon her and has also sought Rs.35,000/- for legal expenses from the OPs.

5.       Therefore, the Complainant has filed this complaint praying for order to:-

1. Direct the OPs to pay amount of Rs.4,70,000/- alongwith interest @ 18% p.a. from the date of death benefit i.e. 24.04.2019 till its realization, in the interest of justice;
2. Direct the OPs to pay compensation of Rs.50,000/- for deficiency in service, unfair and restrictive trade practices and for causing mental and physical agony to the Complainant;
3. Direct the OPs to pay a sum of Rs.35,000/- towards Litigation Expenses to the Complainant;
4. Pass any other relief in favour of the Complainant and against the OPs, which this Hon'ble Forum deems fit in the facts and circumstances of the case, in the interest of justice.

6.       The Complainant has also filed the copies of receipt of payment of premium by the policy holder dated 14.11.2018, death certificate of policy holder Jai Singh, letter dated 03.06.2019 of OPs and death claim of complainant, earlier policy dated 11.10.2011 in the name of Jai Singh (husband of complainant), communication dated 26.06.2019 by OPs, Representation dated 01.06.2020 and its reply dated 15.06.2020 and representation dated 16.06.2020 and its postal receipts with the complaint.

7.       Accordingly, notices were issued to the OPs and in response, the OPs have filed reply jointly stating that:-

(a)    the Deceased Life Assured, Mr.Jai Singh (hereinafter referred to as the       

DLA) had applied for SBI Life -Smart Swadhan Plus policy vide proposal bearing no. IZYA513179 dated 13/11/2018 with an initial proposal deposit of Rs. 30,932/- and  accordingly, he was holding SBI Life -Smart Swadhan Plus policy bearing no. 12536473710 with date of commencement as 15/11/2018 for a basic sum assured of Rs. 5,00,000/- with yearly premium paying term of 5 years and policy term of 10 years.

b.   the Complainant was nominee under the said policy. The said policy was inforce as on date of death of DLA.

 

(c)  In the proposal form, under point no. 18, the DLA had declared that:-

 "I hereby declare that the foregoing statements and answers have been given by me after fully understanding the questions and the same are true, accurate and complete in every manner and that I have not withheld any information. Further, I have not provided any false information in reply to any question. I understand and agree that the statements in this proposal form constitute warranties.....++++ I do hereby agree and declare that these statements and this declaration shall be the basis of contract of assurance between me and SBI Life Insurance Company Limited and that if there is any mis-statement or suppression of material information or if any untrue statement are contained therein or in case of fraud, the said contract shall be treated as per the provisions of Section 45 of the Insurance Act 1938 as amended from time to time." A copy of the proposal form has been annexed with the reply as ANNEXURE - A

(d)   As the risk needs to be assessed while accepting the proposal form for    

Insurance cover, it is essential that the proposer or person whose life       has to be insured gives true and correct answers to the questions in the     proposal form. In the instant case, the DLA answered negatively to all the questions in the medical questionnaire.

(e)  In the proposal form under point no. 14, the DLA replied in negative to

      the specific questions:-

Q. 14 (4) During the last 10 years, have you undergone or advised to undergo hospitalization or an operation or any investigation or tests or medical treatment?

Q. 14 (13) Do you have High Blood Pressure or have you ever suffered or treated or have you been advised to undergo investigation for High Blood Pressure?

Q. 14 (15) Are you suffering from, or did you suffer or undergo investigation in the past from or have you been advised / referred to undergo investigation or treatment for any of the following conditions:-

(k) Brain/ Nervous System Disease / Stroke

(f)      Based on the details furnished in the proposal form and the declaration given by the DLA at the end of the proposal, the OPs had issued a policy bearing no. 12536473710 with date of commencement as 15/11/2018 for a basic sum assured of Rs. 5,00,000/- with yearly premium paying term of 5 years and policy term of 10 years. A copy of the policy document has been annexed with the reply as as ANNEXURE-B.

(g)      The proposal form is the primary document for assessment of risk and answer to each and every question therein is vital for underwriter to decide whether the proposed life is to be insured or not. Thus, any incorrect information stated in the proposal form certainly vitiates the interests of the insurer and hence, the insurer is well within their rights to repudiate the claim wherever materials facts are suppressed by the life assured.

(h)     The DLA- Mr. Jai Singh is reported to have died on 24.04.2019. The OPs received the death claim intimation on 15.05.2019 from the Complainant. A copy of the same has been annexed with the reply as ANNEXURE -C.

(i)      The policy resulted in a claim in a short span of just 6 months, hence the OPs conducted death claim investigation and found that the DLA was suffering from Hypertension and Stroke. As per the Investigation Report, the DLA was hospitalized and took treatment for Hypertension and Stroke and the nominee, who is the present complainant only provided the medical records relied upon by the OP and hence, there is no dispute regarding the same. A copy of the Investigation Report has been annexed with the reply as ANNEXURE - D.

(j)      As per the OPD cards of Tirath Ram Shah Charitable hospital dated 10/06/2016, 17/06/2016, 24/06/2016 and 15/07/2016, the DLA was diagnosed with Ace Hypertension and Stroke and was taking treatment for the same. Copies of the record of OPD of Tirath Ram Shah Charitable Hospital have been annexed with the reply as ANNEXURE – E (Colly).

(k)      As per the OPD card of Tirath Ram Shah Charitable hospital dated 22/07/2016, the DLA was Diagnosed with FUC of Stroke. Copy of the OPD card of Tirath Ram Shah Charitable Hospital has been annexed with the reply as ANNEXURE-F.

(l)      As per OPD card of Tirath Ram Shah Charitable hospital dated 16/09/2016, the DLA was diagnosed with Acc HT C with Stroke with Spondylosis with Fever. Copy of the OPD card of Tirath Ram Shah Charitable Hospital has been annexed with the reply as ANNEXURE-G.

(m)    As per the Discharge Summary of Tirath Ram Shah Charitable hospital dated 23.01.2018, the DLA was diagnosed with Acute Fertile Illness With Ghabrahat with Abnormal Behaviour with Alcohol Withdrawal Syndrome with Cervical Spondylosis with Vertigo with Agitation with Hypertension. Copy of the Discharge Summary of Tirath Ram Shah Charitable Hospital has been annexed with the reply as ANNEXURE – H.

(n)     It is amply proved from the above documents that the DLA was suffering from Hypertension and Stroke and was under treatment for the same prior to signing the proposal form but the DLA did not disclose the material fact regarding his pre-existing illnesses in the proposal form. Had he disclosed the same, the risk cover would not have been offered by the SBI Life and the proposal form would have simply been rejected. Thus, it is evident that there is a suppression of material fact and the DLA availed the insurance cover fraudulently. There is a deliberate suppression of material fact with a fraudulent intention to obtain insurance. The DLA failed in his duties to disclose the material facts in the proposal form. Thus, the contract is void ab initio in terms of Section 17 of Indian Contract Act, 1872 because any contract entered into by Fraud is Void ab initio.

(o)     The clause no.13.3 of the terms and conditions of the policy under - Non Disclosure:-

"13.3.1. We have issued your policy based on the statements in your proposal form, personal statement, medical reports and any other documents that are submitted to us.

13.3.2. If we find that any of this information is inaccurate or false or you have withheld any material information, or in case of fraud, we will have a right to repudiate all the claims under your policy and / or cancel your policy as applicable subject to the provisions of Section 45 of the Insurance Act, 1938 as amended from time to time and no benefit under the policy is payable.

13.3.3 If we repudiate the claim under your policy/ and or cancel your policy on the grounds of fraud, we would forfeit the premiums received under your policy and we shall not entertain any claim under your policy.

13.3.4 If we repudiate the claim/ and or cancel your policy on any grounds other than fraud, we may pay such amounts as are payable under the policy subject to the provisions of the Section 45 of the Insurance Act, 1938, as amended from time to time."

(p)     A contract has to be interpreted as per the terms and conditions of the document evidencing the contract. In the instant case, the Policy Document is the evidence of the Insurance contract.

(q)     The documentary evidence placed on record amply proves that the DLA suffered from Hypertension and Stroke and was under treatment for the same prior to the date of commencement of the policy. Hence the claim under the policy was repudiated and the premium paid was refunded as per the terms and conditions of the policy. The decision of the OPs to repudiate the claim under the policy was communicated to the complainant vide claim repudiation letter dated 03.06.2019. A copy of the claim repudiation letter has been annexed with the reply as ANNEXURE - I.

(r)      The DLA, Mr. Jai Singh failed in his duties towards full disclosure of material facts and thus committed the breach of the doctrine of UTMOST GOOD FAITH. In view of the documentary evidence, SBI Life Insurance Co. Ltd. has lawfully repudiated the claim. Hence all the allegations made in the complaint are false and are denied in toto.

(s)      The request for reconsideration dated 16.06.2020 from the Complainant was referred to the Claims Review Committee (hereinafter referred to as "CRC") headed by the Retired Judge of High Court. The CRC, on the basis of documentary evidence, reviewed the case and upheld the decision of the OPs. The same was also communicated to the Complainant vide letter dated 16.02.2021. A copy of the reconsideration request of complainant  and CRC decision letter has been annexed with the reply as ANNEXURE - J and K respectively.

(t)      As per the provisions under Section 45 of the Insurance (Amendment) Act, 1938 wherein it is categorically stated that in case of fraud, the onus of disproving lies upon the beneficiaries, in case the policyholder is not alive.

(u)     SBI Life Insurance Company Ltd. is fully justified in repudiating the claim on the basis of Insurance Policy which has been obtained by the DLA by non- disclosure of the MATERIAL FACT that he was suffering from Hypertension and Stroke and was under treatment for the same prior to the date of signing the proposal form and thereby obtained the said insurance cover under the said policy fraudulently.

(v)      The OPs have repudiated the claim based on the documentary evidence and the decision of the OPs is as per the terms and conditions of the policy which is just and legal, hence, there is no ground for complaint under Section 35 of the Consumer Protection Act, 2019.

8.       It has also been contended by the OP that:-

   (a)  as per the records, the OPs received a proposal form bearing no. 57QB725845 in the name of DLA dated 30.09.2011 and on the basis of the same, the DLA was issued SBI Life Smart Money Back policy bearing no. 57001735507 with date of commencement as 11/10/2011 for a policy term and premium paying term of 12 years with premiums due on 11th October every year. However, the OPs received only initial premium and the premiums due on 11/10/2012 and onwards were not received by the Company as a result of which the said policy was terminated. A copy of the policy document of policy no. 57001735507 has been annexed with the reply as ANNEXURE- L.

b.       It is specifically denied that the DLA never had any disease to disclose in the year 2018. It is specifically denied that there was no question of disclosing the same to the OP.

(c)      The OPs have not caused mental pain, agony or harassment to the complainant. The claim has been repudiated based on the strong documentary evidence and as per the terms and conditions of the policy. There is no unfair trade practice or deficiency in service on the part of the Ops on one or other false pretext.

(c)      The OPs have not received any representation dated 01.06.2020 and no reply has been sent on 15.06.2020. The letter dated 01.06.2020 is addressed to Hon'ble Insurance Ombudsman and hence, the OPs reserves its comments with respect to the same.

(d)     No cause of action has arisen to file this complaint. Further, the instant complaint is barred by limitation and hence, is liable to be dismissed on this ground alone. The OPs are not liable to pay an amount of Rs.4,70,000/- with or without interest towards death claim amount.

(e)     the action of the OPs to repudiate the claim is based on the strong documentary evidence and as per the terms and conditions of the policy. Hence the same cannot be termed as causing grave mental tension, undue hardship, pain or agony and hence there is no cause of action to file this complaint. The OPs are not liable to pay Rs.50,000/- towards the pain inflicted upon her along with insurance claim and Rs.35,000/- towards litigation expenses.

9.       The  OPs have referred number of judgments on the issue of (1)  Suppression of material facts (2)  Terms & Conditions (3) Responsibility for the contents of the proposal form (4) Medical examination (5) Compassion cannot overturn law and (6) SBI and SBI Life are different legal entities, but copies of the judgments have not been provided. However, the details are furnished below category wise :-

Suppression of material facts

I.        The Hon'ble Apex Court observed in the case of Satwant Kaur Sandhu 18 that “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 hospitalizations. Nonetheless, it is a 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.== As stated in Pollock and Mulla's Indian Contract and Specific Relief Acts: "any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact.”

II.       The Hon'ble National Commission while disposing of FA No. 242 of 2006, in Dineshbha Chandarana & Others Vs. LIC of India, in  order dated 27.07.10 also relied on the same judgment and held that repudiation of claim for non disclosure of previous insurance policies would be justified. The facts of the case are similar to the present one and the ratio of this judgment applies to the present complaint. In the cited case, the Hon'ble National Commission upheld the repudiation holding that the non-disclosure of Previous Insurance Policies would amount to suppression of material facts.

III.      The Hon'ble National Commission while disposing of RP NO. 1573 of 2012, in Sanjay Atmaram Patel Vs. Divisional Manager, LIC of India & 2 Others, in order dated 14.12.2017, relied on the judgment in case of Dineshbhai Chandarana & Others Vs. LIC of India and observed that non-disclosure of earlier policy amounted to suppression of a material fact, therefore insurance company was justified in repudiating the claim.

IV.      The National Consumer Disputes Redressal Commission, in the judgment in the case of Sulochana Devi Vs. LIC of India in Revision Petition No. 4107 of 2009 passed on 22.5.2015, has observed that It was not for him to determine whether the information sought for in the proposed form was 'material' for the purpose of the policy in question. Thus the DLA was under obligation to provide details of previous life insurance policies in reply to the specific question. Reference in this regard may be made to the following judgments also.

(a)     The judgment of Hon'ble Supreme Court in case of Sealark V. United India Insurance Co. Ltd,

(b)     The judgment of Hon'ble National Commission in the case of HDFC Standard Life Insurance Co. Ltd vs Smt Vijayalakshmi  in R.P. No.336 of 2007 on dated 04.02.2011

(c)      The judgment of Hon'ble National Commission in LIC vs. Mansa Devi-II (2003) CPJ-135 (NC)

(d)     The judgment of Hon'ble National Commission in Neelam Gupta vs. Reliance Life Insurance & another (R.P. No.4486 of 2010) order dated 09.02.2011

(e)     In the judgment dated 19.03.2012 in case of LIC of India v/s Kusum Patro, the Hon'ble National Commission has relied on the judgment of Hon'ble Supreme Court in the case of P C Chako V/s LIC, Satwant Kaur Sandhu V/s LIC and LIC V/s Asha Goel and upheld the sanctity of principle of utmost good faith. It has been further observed that the principle underlying the doctrine of disclosure and a rule of good faith oblige the proposer to answer every question put to him with complete honesty and the honesty implies truthfulness

(f)      The judgment of Hon'ble National Consumer Disputes Redressal Commission dated 07.12.2016 in  FA No. 958 of 2015 in the case titled as Chandan Ratan Lahoti & 2 others vs. Aviva Life Insurance Co. Ltd & Another.

(g)      The judgment of Hon'ble National Consumer Disputes Redressal Commission dated 29.11.2016, in Revision Petition No. 4770 of 2012 in the matter of Smt. T Pushpamma vs. Senior Branch Manager, LIC of India & Another.

(h)     The judgment of Hon'ble National Consumer Disputes Redressal Commission dated 26.07.2016 in Revision Petition No. 1085 Of 2016 in the matter Krushna SureshkumarTaruna vs. LIC & another

(i)      The judgment of Hon'ble National Consumer Disputes Redressal Commission dated  29.08.2016, in Revision Petition No. 2271/2011 in the matter of Smt. Phoola Kumari vs. Life Insurance Corporation of India.

(j)      The Hon'ble supreme court in Civil Appeal No. 3359/2019, titled as Oriental Insurance co. v/s Mahendra Constructions, vide judgment dated 01.04.2019 has inter alia ruled that the burden cannot be cast upon the insurer to follow up on an inadequate disclosure by conducting a line of enquiry and emphasized the duty of the insured to make honest and complete disclosure of material facts. The Court observed that "It is evident on bare reading of the proposal form that the material information which was required to be disclosed was suppressed by the Insured. The proposal form contains a declaration of the insured that the statements which are made are true to the knowledge of the proposer and the declaration forms the basis of the contract of insurance with the insurer....... The fact of the matter is that the Respondent was under an obligation to make the full disclosure of the status of the previous insurance policy...... In the circumstances the decision of the SCDRC to allow the claim was erroneous and the NCDRC equally erred in affirming the decision."

(k)      The Hon'ble supreme court in Civil Appeal No. 4261/2019, titled as Reliance Life Insurance co. Ltd & Ors v/s Rekhaben Nareshbhai Rathod vide judgment dated 24.04.2019 in a case about suppression of the details of the previous life insurance policies,  has observed the argument of the respondent that signatures of the assured on the form were taken without explaining the details cannot be accepted.

Terms & Conditions

V.       The Hon'ble NCDRC in order dated 02.02.2010 in Revision Petition No.211 of 2009 [Reliance industries Vs. Madhavacharya), clearly relied on the Hon'ble Apex Court's ruling in General Assurance Society Limited Vs Chandumull Jain & Anr where the Hon'ble Apex Court held that "in interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable."..

VI.      The OPs have also referred the following judgments:-

1.       The judgment of Hon'ble National Consumer Disputes Redressal Commission in First Appeal No. 157 of 2006 titled as IND Swift Limited v/s New India Assurance Co Ltd;

2.       The judgment of Hon'ble National Consumer Disputes Redressal Commission dated 09.01.2014 in the matter of LIC of India V/s Kamlesh,

3.       The judgment of Hon'ble Supreme court in the case of Oriental Insurance Co. V/s Sony Cherian =====

4.       The judgment of Hon'ble Supreme Court United India Insurance Co. V/s Harchan Rai Chandan Lal (2004 (8) SCC 644)

5.       The judgment of Hon'ble National Consumer Disputes Redressal Commission in the matter of United India Insurance Co. Ltd vs. Subhash Chandra in R.P. no. 469/2006

6.       The judgment of Hon'ble National Consumer Disputes Redressal Commission order  06.05.2014 in the matter of Col. TS BakshiRetd. Vs. Star Health & Allied Insurance Co. Ltd,

7.       The judgment of Hon'ble National Consumer Disputes Redressal Commission    Order dated 21.05.2014 in   Revision Petition No. 3390 of 2013 in the matter of Kishor Chandrakant Rathod Vs. Managing Director, ICICI Prudential Life Insurance Co. Ltd. & Another

                    Responsibility for the contents of the proposal form

VII.               The judgment of Hon'ble National Consumer Disputes Redressal Commission    dated 10.10.1994 in the matter of LIC of India Vs. M. Gowri & others clearly held that "While filling up proposal form an agent acts as an agent of the insured for whose benefit the insurance is to be obtained".

VIII.              The Hon'ble Supreme Court in Civil Appeal No.4261 of 2019 vide judgement dated 24.4.2019 in the matter of Reliance Life Insurance Co. Ltd. &Anr. Vs. Rekhaben Nareshbhai Rathod, has observed that: "It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries".

IX.               The OPs have also referred the following judgments on “Responsibility for the contents of the proposal form”:-

• The judgment of Hon'ble National Consumer Disputes Redressal Commission  Dated 15.10.2020 in the matter of Senior Manager, LIC vs Rajesh Kumar Order
• The judgment dated 26.06.2012 passed by the Hon'ble Maharashtra State Commission in  First Appeal No. A/11/300 in LIC OF INDIA v/s Ashish Agarwal
• The judgment dated 20.10.2009 passed by Hon'ble Supreme Court judgment  in the case of Grasim Industries Ltd vs Agarwal Steel in Civil Appeal Nos. 5994 of 2004, 7477 of 2004 and 1733 of 2005.

                    SBI and SBI Life are different legal entities

X.                The Hon'ble National Consumer Disputes Redressal Commission, while disposing of the revision petition no. 2884 of 2010 in SBI Life Insurance Co. Ltd Vs. Smt. Asha Dixit & others clearly held that “.. even though OPs 1 & 2 are sister concerns belonging to the same SBI group, since they are separate legal entities, OP-2 insurance Company cannot be held responsible for the fault of the OP-1 Bank."

                    Medical examination

XI.               The Hon'ble Supreme Court in the case of Mithoolal Nayak vs. LIC of India [1962 AIR 814], has held that even if the life to be assured is examined by a Doctor of the Insurer, the insured is not absolved from his/her responsibility of disclosure of material facts in a contract of insurance. The Hon'ble Apex Court held the same view in the case of Chacko Chan vs. LIC of India.

XII.               The Hon'ble National Consumer Disputes Redressal Commission, in Maya Devi vs LIC of India in RP no.2091 of 2007 also clearly held that "The contention that this disease was not detected at the time of medical examination by the doctors of the Respondent/Insurance Company does not carry much credibility because as is well known, these check-ups are general in nature. Hence the mere fact that a normal medical examination of the life to be assured was conducted, does not absolve him from his responsibility of full disclosure of material facts.

                    Compassion cannot overturn law

XIII.              The Hon'ble National Consumer Disputes Redressal Commission, in the case of LIC of India vs Raksha Goyal in R.P.No.947 of 1997,  has observed that "Compassion that is a concern for the sufferings or misfortune of the complainant is one thing but that cannot overturn the law." Further, the Hon'ble Apex Court, in Chacko Chan vs. LIC of India and in several earlier judgments clearly ruled that "even though LIC is a STATE, it cannot be expected to make a charity of Public Money."

10.     The Complainant has also referred the following judgments in support of the complaint case:- 

(a)   Hon'ble NCDRC, New Delhi in Revision Petition No.4461/2012 titled as Neelam Chopra Vs. LIC & Ors. Wherein it has observed in Para No.10 & 11 that :-

"10. It is mentioned in the Medical Attendance certificate that the   patient was suffering from five months before the date of death by the disease. Clearly, the DLA died on 07.01.2004 and therefore, the disease on account of which the death occurred was not prevailing on the date of filing of the proposal form as the proposal form was filled on 24.01.2003. It has also been alleged that the DLA was suffering from diabetes as mentioned in the treatment record of PGI Chandigarh. He was suffering for 3-4 years from diabetes. In the certificate of Medical Attendance, it is also mentioned that the DLA was suffering from diabetes, however, diabetes was under control. So far as the life style diseases like diabetes and high blood pressure are concerned, Hon'ble High Court of Delhi has taken the following view in Hari Om Agarwal Vs. Oriental Insurance Co. Ltd., WP(C) No.656 of 2007, decided on 17.09.2007 that there is no dispute that diabetes was a condition at time of submission of proposal, so was hyper tension-Petitioner was advised to undergo ECG, which he did. Insurer accepted proposal and issued cover note. It is universally known that hypertension and diabetes can lead to a host of ailments, such as stroke, cardiac disease, renal failure, liver complications depending upon varied factors That implies that there is probability of such ailments, equally they can arise in non-diabetics or those without hypertension It would be apparent that giving a textual effect to Clause 4.1 of policy would in most such cases render mediclaim cover meaningless- Policy would be reduced to a contract with no content==, in event of happening of contingency- Therefore Clause 4.1 of policy cannot be allowed to override insurer's primary liability- Main purpose rule would have to be pressed into service- Insurer renewed policy after petitioner underwent CABG procedure- Therefore refusal by insurer to process and reimburse petitioner's claim is arbitrary and unreasonable As a state agency, it has to set standards of model behaviour, its attitude here has displayed a contrary tendency- Therefore, direction issued to respondent to process petitioner's claim, and ensure that he is reimbursed for procedure undergone by him according to claim lodged with it, within six weeks and petition allowed."

11. From the above, it is clear that the insurance claim cannot be denied on the ground of these life style diseases that are so common. However, it does not give any right to the person insured to suppress information in respect of such diseases. The person insured may suffer consequences in terms of the reduced claims." Copy of above judgment is annexed with this Written Submission.”

(b)     Hon'ble Supreme Court in Manmohan Nanda Vs. United India Assurance Co. Ltd. & Anr. (2022) 4 SCC 582 has held in Para No.73 to 75, that:-

"73. Therefore, it is observed that any complication which would arise from Diabetes Mellitus-II was also within the consideration of the insurer. Despite the aforesaid facts regarding the medical record of the insured, the Insurance Company decided to issue the policy to the appellant. The aforesaid clause has to be read against the respondent insurer by applying the contra proferentem rule against it. Otherwise, the very contract of insurance would become meaningless in the instant case. Hence, in our considered view, the respondent Insurance Company was not right in repudiating the policy in question.

74. The object of seeking a mediclaim policy is to seek indemnification in respect of a sudden illness or sickness which is not expected or imminent and which may occur overseas. If the insured suffers a sudden sickness or ailment which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder.

75. Hence in the instant case, the repudiation of the policy by the respondent Insurance Company was illegal and not in accordance with law. Consequently, the appellant is entitled to be indemnified under the policy. In view of the aforesaid discussion, we hold that the Commission was not right in dismissing the complaint filed by the appellant herein."

11.               Accordingly, the complaint has been examined taking into consideration the facts of the case and averments/documents/Evidence & arguments put forth by the complainant & OPs and it has been observed that the DLA was under obligation to fill up the details correctly in the proposal form so that the proposal for insurance would have been rejected or the insured would have been subjected to further investigations before providing the policy cover, by the OP. On the basis of reply of the OPs supported with medical records of the DLA dated 10/06/2016, 17/06/2016, 24/06/2016, 15/07/2016, 22/07/2016 and 16/09/2016 of treatment in Tirath Ram Shah Charitable hospital, it is proved that the deceased had furnished incorrect information in the proposal form while taking the insurance policy in question and the allegations/averments/relief sought by the complainant are not sustainable.

 

12.               In view of these observations, we are of considered opinion that the OPs have rightly repudiated the claim of the complainant and the complaint is dismissed being devoid of merits.

 

13.               Order be given dasti to the parties in accordance with rules. Order be also uploaded on the website. Thereafter, file be consigned to the record room.

 

 

                               ASHWANI KUMAR MEHTA                                                 DIVYA JYOTI JAIPURIAR

                                                Member                                                                                      President        

                                       DCDRC-1 (North)                                                                        DCDRC-1 (North)