Delhi

North

CC/81/2021

ASHOK ARORA - Complainant(s)

Versus

STAR HEALTH AND ALLIED INSURANCE CO. LTD. - Opp.Party(s)

10 Aug 2023

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

 

CC No.81/2021

Ashok Arora

S/o Late Shri J L Arora

D-102, Victoria Garden Towers M2k

Azadpur, Delhi- 110033                                                                                                      …       Complainant

 

Vs.

M/s Star Health & Allied Insurance Co. Ltd.

(Through its Directors/ MD)

1^st Floor, Himalaya Bhawan

23, Kasturba Gandhi Marg

New Delhi- 110001

 

Also at:

Regd and Corp Office:

1, New Tank Street

Valluvar Kotam High Road

Nngambakkam, Chennai- 600034                                                                                      …     Opposite Party

         

 

10.08.2023

ORDER

(Divya Jyoti Jaipuriar)

By way of this complaint, the Complainant herein has pleaded that the M/s Star Health & Allied Insurance Co. Ltd. (OP herein) has repudiated his medical claim vide its repudiation letter dated 21.03.2021 on the ground of non-disclosure of the pre-existing disease, although the claim was for the treatment of Covid. The said repudiation letter has been challenged by the Complainant in this complaint.

2. We issued notice on the complaint and the OP has filed its reply. In the reply, the OP has defended the repudiation letter particularly on the ground that the Complainant did not disclose about his pre-existing diseases while purchasing the policy. OP has contended that the Complainant was diagnosed with “Coronary Artery Disease (CAD)- Anterior Wall Myocardial Infarction (AWMI)” prior to the inception of the policy and the Complainant did not disclose the same in the proposal form. It is also pleaded by the OP that as there was non-disclosure of the material fact, the policy claim was repudiated. Along with the reply, the OP has also filed the online proposal form duly filled up by the Complainant at the time of purchase of policy and the same has also been authenticated through OTP.

3. The Complainant has not denied the said proposal form. As a matter of fact, the Complainant has in a way accepted the fact that he did not disclose the said ailment in the proposal form. In the complaint, the discharge summary dated 06.05.2007 has been filed by the Complainant, in which he has been diagnosed with “CAD-Recent AWMI”. In rejoinder, the Complainant has stated that he was aware that the heart related surgeries are not covered in first year of policy and this policy was obtained for emergencies and other ailment.

4. During arguments, the Complainant in person emphasised that this claim was not with respect to any treatment of pre-existing disease but for covid treatment. He also argued that as the claim was not for any pre-existing disease, the repudiation on the ground of non-disclosure of pre-existing disease was not correct. On the other hand, Ms Kriti Khokhar, Ld. Advocate for the OP has argued that admittedly, the Complainant was having pre-existent health issue which was not disclosed in the proposal form. She has drawn our attention to the online proposal form dated 28.09.2020, which was filled up and authenticated by the Complainant. In the said proposal form, the Complainant has answered to the question “Do you have any health problem?” as “None”. She further argues that this is concealment of material fact as the Complainant was admittedly diagnosed with CAD-AWMI in the year 2007, which is prior to inception of the policy in question.

5. Ld. Advocate for the OP further argues that non-disclosure of pre-existing health issue is clearly concealment of material fact and the same is a valid ground for repudiation of the claims under the policy. It has also been argued that while repudiating the claim the OP has also cancelled the policy in question.

6. On the issue of concealment of material facts, Hon’ble Supreme Court in the matter of Reliance Life Insurance Company Limited vs Rekhaben Nareshbhai Rathod [(2019) 6 SCC 175] has already settled the issue. In the Reliance life Insurance case (supra), the issue was similar to the facts in the case in hand and Hon’ble Supreme Court has held that non-disclosure of existing individual life insurance policy by the insured is concealment of material fact and the Insurance Company is justified in repudiating the claim on such ground. In this context, Hon’ble Supreme Court has also referred to its earlier judgment in the matter of Satwant Kaur Sandhu vs New India Assurance [(2009) 8 SCC 316] in which it has been held that information sought in the proposal form is material for the purpose of entering into contract of insurance. In Reliance case (Supra), Hon’ble Supreme Court held as under:

“30. 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. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.

31. The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur [Satwant Kaur Sandhu v. New India Assurance Co. Ltd., (2009) 8 SCC 316 : (2009) 3 SCC (Civ) 366] “there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance”. Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.

32. In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued a life insurance cover despite the earlier cover of insurance is a decision which was required to be taken by the insurer after duly considering all relevant facts and circumstances. The disclosure of the earlier cover was material to an assessment of the risk which was being undertaken by the insurer. Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured had in such a short span of time obtained two different life insurance policies. Such a fact is sufficient to put the insurer to enquiry.”                              (underlining by us)

7. It is clear from the judgment of Hon’ble Supreme Court in Reliance case (supra) that the when the insured purchased the policy in question, non-disclosure of the of any information sought in the proposal form including existence of any health conditions, is clearly a case of suppression, untruth or inaccuracy in the statement of the insured and the same is a valid ground for repudiating the claim filed by the Complainant herein. Therefore, we do not find any infirmity in the repudiation letter dated 21.03.2021, which has subsequently been confirmed on 21.04.2021. Hence, we are of the opinion that this complaint is liable to be dismissed. Accordingly, for the reasons explained above, this complaint is dismissed.

8. Office is directed to supply the copy of this order to the Complainant as per rules. Office is also directed to return all original documents filed by the Complainant, if any, after keeping copies of the same in the record. Thereafter, file be consigned to the record room.

9. Order pronounced in open court.

 

 

___________________________

Divya Jyoti Jaipuriar, President

 

 

 

___________________________

Ashwani Kumar Mehta, Member

 

 

 

___________________________

Harpreet Kaur Charya, Member