Haryana

StateCommission

A/894/2016

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

Versus

SUMAN SOLANKI - Opp.Party(s)

NITESH SINGHI

05 Dec 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

         

                                       

First Appeal No  :       894 of 2016

Date of Institution:      28.09.2016

Date of Decision :      05.12.2017

 

1.      Star Health and Allied Insurance Company Limited, KRM Centre, VI Floor, No.2, Harington Road, Chetpet, Chennai-600031 through its Divisional Manager.

2.      Star Health and Allied Insurance Company Limited, Flat No.209-210, 2^nd Floor, Tribhuvan Complex, Ishwar Nagar, Mathura Road, New Delhi-110025.

3.      Star Health and Allied Insurance Company Limited, Sector 16 Market, Near Green Channel, Faridabad.

                             Appellants-Opposite Parties

 

Versus

Mrs. Suman Solanki wife of Sh. Susheel Solanki, resident of House No.714, Sector 30, Faridabad.

Respondent-Complainant

 

 

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

                             Shri Balbir Singh, Judicial Member.

                             Shri Diwan Singh Chauhan, Member.

                                                                                                                            

Present:               Shri Nitesh Singhi, Advocate for appellants.

                             Shri Vaibhav Prashar, Advocate for respondent-complainant.

 

 

                                                   O R D E R

 

 

NAWAB SINGH J. (ORAL)

 

The instant appeal filed by Star Health and Allied Insurance Company Limited and its functionaries-opposite parties (for short, ‘Insurance Company’) calls in question the correctness of the order dated August 08^th, 2016 passed by District Consumer Disputes Redressal Forum, Faridabad (for short ‘the District Forum’) whereby complaint filed by Suman Solanki-complainant was allowed.  The Insurance Company was directed to pay Rs.1,45,656/- alongwith interest at the rate of 9% per annum from the date of filing the complaint till realization; Rs.5500/- as compensation and Rs.2200/- litigation expenses to the complainant on account of expenses incurred by her on her treatment.   

2.      The complainant purchased Medi Classic Health Insurance Policy(Individual) on August 23^rd, 2011 from the Insurance Company.  The period of insurance was August 23^rd, 2011 to August 22^nd, 2012. The sum insured was Rs.3,00,000/-. The complainant fell ill and took treatment from Fortis Escorts Hospital and Research Center, Faridabad.  She spent Rs.1,52,462/- on her treatment. The claim submitted by the complainant was repudiated by the Insurance Company.  Aggrieved thereof, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986. 

3.      The Insurance Company, in its written version, denied the averments of the complaint and pleaded that policy was purchased on August 23^rd, 2011 whereas as per Discharge Summary (Annexure O-10) of Fortis Escorts Hospital, Faridabad, the complainant was a patient of Cerebrovascular Accident (Brain Stroke) in 2008, which was not disclosed by her at the time of purchase of the policy.     

4.      The question for consideration before this Commission as to whether the Insurance Company was justified in repudiating complainants’ claim or not?

5.      The insured purchased insurance policy on August 23^rd, 2011.  Prior to the purchase of the insurance policy, the complainant was a patient of Cerebrovascular Accident (Brain Stroke) in 2008 as is evident from Discharge Summary Sheet (Annexure O-10) of Fortis Escorts Hospital, Faridabad.

6.      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.” 

7.      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………….”

8.      Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

9.      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…..”  

10.          On the aforesaid facts and law enunciated, the right to claim insurance benefits by the complainant does not survive having reference to Discharge Summary Sheet (Annexure O-10) issued by Fortis Escorts Hospital, Faridabad. Thus, it stands established to the hilt that the complainant was suffering from Cerebrovascular Accident (Brain Stroke), prior to the purchase of the insurance policy and she suppressed this fact. Thus, the District Forum fell in error in allowing the complaint and as such the impugned order cannot be allowed to sustain. The appeal is accepted, the impugned order is set aside and the complaint is dismissed.

11.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

 

Announced 05.12.2017

(Diwan Singh Chauhan) Member

(Balbir Singh) Judicial Member

(Nawab Singh) President

 

U.K