Haryana

StateCommission

A/601/2017

SHITAL KUMAR - Complainant(s)

Versus

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

RAJESH BANSAL

01 Mar 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

 

 

 

                                                          First Appeal No  :      601 of 2017

Date of Institution:     18.05.2017

Date of Decision :      01.03.2018

 

 

Shital Kumar son of Shri Jai Bhagwan, resident of House No.620/2, near Halwai Atta, Jain Street, Panipat.

                                      Appellant-Complainant

 

 

Versus

 

 

 

1.      Star Health and Allied Insurance Company Limited, 2^nd Floor, R.J. Tower, (Near N.K. Tower), Opposite I.B. College, G.T. Road, Panipat.

 

2.      Star Health and Allied Insurance Company Limited, 1, New Tank Street, Valluvar Kattam High Road, Ningambakkam, Chennai -600034 through its Manager.

                                      Respondents-Opposite Parties

 

 

 

 

 

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri Balbir Singh, Judicial Member       

                            

 

 

 

Argued by:          Shri Rajesh Bansal, Advocate for appellant

                             Shri Sahil Abhi, Advocate for the respondents

 

                              

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

          Shital Kumar-complainant purchased Family Health Optima Insurance Policy from Star Health and Allied Insurance Company Limited-opposite parties (for short ‘Insurance Company’) for himself and his family members, that is, wife, son and daughter. The period of insurance was from November 27^th, 2012 to November 26^th, 2013. Geetansh, son of the complainant fell ill in the month of August, 2015 and spent Rs.2,50,000/- on his treatment. The complainant filed claim with the Insurance Company but the same was repudiated on the ground that Geetansh was having coarsened hepatic echotexture (chronic liver disease) in the year 2012. At the time of purchase of the insurance policy, the complainant did not disclose that Geetansh had pre-existing disease, so, the claim was repudiated.

2.      Aggrieved of the repudiation, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Consumer Disputes Redressal Forum, Panipat (for short ‘District Forum’). The District Forum dismissed the complaint vide order dated March 21^st, 2017.                 

3.      Against the aforesaid, the complainant has filed the instant appeal.

4.      It is not in dispute that as per Out Patient Health Card dated August 16^th, 2012 (Exhibit R-2), Geetansh was diagnosed to have hepatitis. There was note in the ultrasound of abdomen dated May 09^th, 2012 (Exhibit R-1) to the effect that liver shows coarse echotexture, which was chronic liver disease.  The complainant purchased the policy on November 27^th, 2012.  Thus, it is clear that the aforesaid medical record was prior to the purchase of the insurance policy. The treatment record has not been controverted by the complainant.  It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – uberrimae fidei, applicable to both the parties.  The rule of non-disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out facts which would materially affect the risk.  The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries.  A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.” 

5.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

6.      In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that 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, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

7.      On the aforesaid facts and principles enunciated, the complainant had no right to claim the benefits of insurance. Thus, the District Forum has rightly dismissed the complaint and as such, the appeal is also dismissed.

 

Announced 01.03.2018

(Balbir Singh) Judicial Member

(Nawab Singh) President

UK