KUNDAN KUMAR KUMAI

This is an Appeal u/s 41of the Consumer Protection Act, 2019, preferred against the order and judgement dated 18/08/22, passed by the Ld. DCDRC, Darjeeling.

Brief facts of the Appellant’s Case are that, the Respondent’s mother had purchased LIC’s New Endowment Plan from the Appellant/Insurance Company, being Policy no. 454041988 dated 20/09/2015 at a monthly premium of Rs.1397/-, while she was working in the West Bengal State Electricity Distribution Co. Ltd., Darjeeling, in the post of Group – D.  During her life time, she had deposited a sum of Rs.47,498/- up to June, 2018, since 2015. Thereafter on her death, as she had fulfilled the criteria for medical insurance, she was entitled to full premium. She had died intestate on 28/07/2018 and her sister Late Vawna Balmiki, who was her nominee, had predeceased her on 13/10/2016. The Respondent had then approached the Appellant/Company in the month of Sept. 2018, for the release of his mother’s deposited amount with interest, but the Appellant/Insurance Company had failed to release the same, depriving the Respondent from the legally entitled amount. The Appellant/Insurance Company thereby committed deficiency in service, for which reason the Respondent filed this complaint before the Ld. DCDRC, Darjeeling with necessary prayers. Hence this Case.

The Appellant/Insurance Company, in order to contest the claim filed written version, wherein the claim that the Respondent’s mother, had purposely suppressed the material facts with an ill-motive. Though the purchase of the Policy was admitted, the claim against the said Policy had been repudiated by the Divisional Office Dispute Redressal Committee on 22/10/2019, on finding sufficient evidences of suppression of treatment of various illness, prior to purchasing the Policy. The deceased /life assured, had given false statement to the answers of the question no.11 (a – i) in the Proposal Form, knowingly to get the proposal accepted. The above decision had also been communicated to the Respondent.

As the acceptance of Life Insurance proposal, is based on utmost good faith, the deceased/policy holder, had suppressed material facts while answering the question no.11 (a – i) in the Proposal Form, thereby making the Insurance Contract null and void. They therefore prayed for dismissal of the Case.

After hearing both the sides and ongoing through the evidence on record, the Ld. DCDRC, Darjeeling passed the Impugned Order allowing the Case with the litigation cost of Rs. 25,000/- and directing the Appellant/Company to pay the sum of Rs.3,18,516/-, within a month, from the date of the Order, failing which interest @ 9% per annum, would be attracted till the realization of the same.

Being aggrieved by the above Order, the Appellant/Company preferred the instant Appeal on the ground that the deceased/policy holder had suppressed material facts and had thus violated the doctrine of Utmost Good Faith as also the provisions of section 45 of the Insurance Act, 1938, along with the doctrine of Uberrimae Fidei.

                                                       Decisions with Reasons

Ld. Advocate for the Appellant, at the time of final hearing, had submitted that the deceased/policy holder, had suppressed the material facts while answering the question of 11 (a – i) in the Proposal Form, thereby attracting the provisions of section 45 of the Insurance Act, 1938. She had availed medical leave, from 06/01/2014 to 11/01/2014, prior to purchasing the Insurance Policy. She was also on medical leave from 12/11/2014 to 22/11/2014. That apart she had been on diabetic drug, as her blood sugar level could not be controlled. She was also suffering from cystitis (UTI) and left foot ulcer. Therefore the Ld. Lower Commission had failed to appreciate the above and passed an erroneous judgement. He had relied in the judgments passed in P. C. Chacko & Anr. Vs. Chairman Life Insurance Corporation India & Ors. reported in CPJ Volume III 2008 78 (SC), Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd. reported in CPJ Volume IV 2009 8 (SC), Manmohan Nanda Vs. United India Insurance Co. Ltd. & Or. reported in CPJ Volume I 2022 20(SC) and Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathore passed in Civil Appeal No. 4261 of 2019(SC).

Ld. Advocate for the Respondent, on the other hand, had submitted that the Ld. DCDRC, Darjeeling had rightly passed the Impugned Judgement and the deceased/policy holder had also relied on the Appellant/Insurance Company, that the legal heirs would get the sum assured. The deceased/policy holder was not highly educated lady and could barely put her signature and had disclosed everything which had been asked by the Agents of the Appellant/Insurance Company. That apart by relying on the Impugned Judgement, had argued that once the Appellant/Insurance Company had been satisfied after verification, that the deceased/policy holder, had been fit to purchase the Policy, the Appellant/Insurance Company should not absolve itself from the liabilities, by pointing out that the deceased/policy holder had suppressed her illness. Moreover, the deceased/policy holder being a lady of limited educational background had been impressed by the Agent of the Appellant/Insurance Company, who was keen to sell the Policy and to make the deceased/policy holder to purchase the Policy, for which she had been made to put her signature in the last 2 pages of the 6-page Proposal Form only, viz. on page 46 & 47, of the instant memo of appeal. He therefore prays for dismissal of the Appeal.

It is admitted position that the period of more than two years had elapsed and for the Appellant/Insurance Company to assail the Policy of the deceased/policy holder on the ground that she had suppressed the material facts, under the provisions of the section 45 of the Insurance Act, 1938, the Appellant/ Insurance Company must now not only prove that the deceased/policy holder had suppressed the material facts knowingly and that she had done it with a fraudulent intent. In this regard, the Appellant/Insurance Company is relying on the documents Annexure I and J. Annexure I consisting of 2 pages is the medical leave application of the deceased/policy holder from 06/01/2014 to 11/01/2014 and 12/11/2014 to 22/11/2014. Annexure J comprises of 3 pages and the 1^st page is the prescription of Dr. Subhas Moktan dated 06/01/2014 and the 2^nd page is the Medical Fit Certificate dated 10/01/2014 and the 3^rd page is the Medical Fit Certificate dated 22/11/2014. It is admitted position that the deceased/policy holder suppressed the material facts, as Annexure I & J clearly lay claim to that fact. Now, the question that arises is what should be considered as material. Mere ulcer in the left leg and a diabetic diagnosis would not claim as one, because neither of the ailments, can be described as life threatening, the doctor did not find the leg ulcer to be one and had it been so he would have advised immediate admission for further management of the said ailment. The diabetic diagnosis is also based on fasting blood sugar level, which indicates that the patient had just started being diabetic, as the medicines had been started on fasting blood sugar level. Had the patient been a chronic diabetic, the HBA1C level blood sugar would have been required. Therefore, the diabetic angle, also does not appear to be life threatening, for which it needed suppression. Moreover, diabetes is now considered a life style disease, which can be lived with, with regular monitorization. Now the Appellant/Insurance Company must prove that the above suppression was done with a fraudulent intent. In this regard, the death of the lady occurred on 28^th July, 2018, therefore the lady being a person of limited education and a Group-D employee at that, could not have foreseen her death on the basis of the above diagnosis and therefore the answers to the Proposal Form could not have been done with a fraudulent intent. It could have resulted from some misunderstanding between the Agent and herself, or something else. Similarly, the treatment of cystitis although the prescription is not available but the Medical Fit Certificate clearly shows that the same had been cured and therefore its suppression could not have been materialistic enough.

Even though the above rulings support the doctrine of Uberrimae Fidei, but in cases like this, the above doctrine should be applied liberally so that the Institution of Insurance is not affected as the large parts of the population of this country is merely literate and not educated with the above doctrines, as insurance is mostly needed for these types of people, in order to provide the benefits of insurance to the people. Under the circumstance, the instant Appeal fails.

                                                It is therefore

                                                  ORDERED

That the instant Appeal be and the same is dismissed on contest but without cost. 

The Impugned Order is hereby upheld.

Copy of the Order be sent to the Parties free of cost.

Copy of the Order be sent to the Ld. D.C.D.R.C., Darjeeling for necessary information.

Statutory amount deposited be returned from whom received.

Joint-Registrar, W.B.S.C.D.R.C., Siliguri to take necessary steps, in this regard.