The fact in brief to give rise of the present case is that the complainant is the widow of Late Dipak Kumar Mahato who on 16/7/2012 was holder of Life Insurance Policy from Tata AIA Life Insurance Co. Ltd bearing certificate no. U136665610 (vide Annex-2). During validity period of the said policy on 02/1/2014 the insured died. On the death of the insured, the complainant being the nominee under the said insurance policy, preferred a claim to the said insurance company to get the policy coverage amount/death benefit of Rs. 9,73,050/- (Rupees Nine Lakh seventy three thousand fifty). However, by letter dt. 5.9.14 the claim was settled to Rs. 1,16,809/- (Rs. One lakh sixteen thousand eight hundred nine) only by the insurance company on the ground that the deceased-insured had suppressed material information regarding his health at the time of taking the life insurance policy in question. The complainant vide letter dated 7/8/14 (Annexure 8) informed the insurance company that on due verification of every quarries including medical check-up the policy in question was issued and so she is entitled to get death benefit but the insurance company paid no heed. Alleging deficiency in service, the complainant filed the present complaint before this District Forum.
The O.P. has been contesting the case by filing written version contending inter-alia that the claim is barred by provision of Section 45 of the Insurance Act. 1938 and there is no scope to entertain the claim in view of the decision of certain upper Forum in cases having similar ratio of fact and law. Hence the O.P. has prayed for dismissal of the case.
Now the point for consideration is whether the complainant is entitled to any relief? If so, what is the relief/reliefs she is entitled to?
Decision with reason
Admittedly, the husband of the complainant was holder of a policy certificate bearing no. U 136665610 dated 16/7/2012 of Tata AIA Life Insurance Company Limited (vide Annex 2). During the continuation of the said policy the life assured died on 02/01/2014 (vide Annex 5). The complainant being the nominee preferred claim but the same was repudiated on the ground of suppression of material facts (vide Annex 7) and prayer for reconsideration (vide Annex 8) of such repudiation was also turned down (vide Annex 9) Allegation of suppression of material facts in obtaining the policy was ground for repudiation of claim. Let us now deal with this point. To the queries relating to information as to whether the LA, prior to taking of the policy, had been suffering from certain specific diseases or was under treatment of a doctor for certain ailments or was hospitalized for his treatment with regard to some ailments/disease etc the LA answered all such queries in the negative as it appears from the proposal form. Ld advocate for the O.P. placed reliance upon the provision u/S 45 of the Insurance Act 1938 which runs as follows:
Policy not to be called in question on ground of mis-statement after two years.
No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of insured, or in any other documents leading to the issue of policy, was inaccurate or false, unless the insurer shows that such statements was on a material matter of suppressed fact which it was material to disclose and that it was fraudulently made by the policy holder and the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.
In addition to this Ld advocate for the O.P. has placed his reliance upon a decision in the matter of Mohit Kohli –vs- Branch Manager, Aviva Life Insurance Co Ltd (Judgment & order dated 1/4/14 passed by State Consumer Commission, Delhi, first appeal 170/11) where it has been held that suppression of material fact regarding previous ailments would amount to repudiation of claim. He has also placed his reliance upon a decision reported in AIR 1959 PA(413) [Ratan Lal & anr –vs- Metropolitan Insurance Co. Ltd] where it has been held that ‘ The well settled law in the field of insurance that contract of insurance including the contracts of life insurance are contract Uberrima fides and every fact of materiality must be disclosed otherwise there is good ground for rescission and this duty to disclose continues upto the conclusion of contract and covers any material alteration in the character of the risk which may take place between proposal and acceptance.
Ld advocate for the O.P. has also referred the observation of Hon’ble Apex Court’ relied upon in a decision by NCDRC in the matter of Life Insurance Corporation of India -vs- Smt. Kusum Patra, (Revision Petition No. 1585/11) which are as follows:
There are three conditions of application of second part of Section 45 of Insurance Act such as
- the statement must be on a material matter or suppressed facts which it was material to disclose;
- the suppression is fraudulently made by the policy holder; and
- the policy holder knew at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
Now, the term ‘material fact’ is not found to have been defined in the insurance act and so it has to be understood and explained by the court in general terms as held by Hon’ble National Commission to mean as to ‘ any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the contract of insurance and has a bearing on the risk in fixing the rate of the premium is a material fact…………… In this regard, it would be apposite to make a reference to Regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of policy holders’ interests) Regulation 2002 which explain the meaning of the term “material” to mean and include important, essential and relevant information in the context of guiding the insurer to decide whether to undertake the risk or not. Another reference has been cited in a case between LIC of India and Kusum Patra decided by Hon’ble NCDRC where it has been observed that “in the contract of insurance any fact which would influence the mind a prudent insurer in deciding whether to accept or not the risk is a ‘material fact’. If the proposer has knowledge of such fact he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasis that any inaccurate answer will entitle the insurer to repudiate his 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.
Therefore, summing up the argument advanced by Ld advocates of the respective parties and keeping in mind the decisions relied upon by them and consideration of pleadings, evidence and documents brought on record, we are of the clear opinion that contract of insurance is based upon the principle Uberrima fides i.e. a contract based on the principle of utmost good faith. In such view of the matter we accept the argument advanced by Ld advocate for the O.P. which is found to be fortified by the observation and decision made by Hon’ble Superior Forum and Court in catena of judgments.
Now the question to be dealt with is whether omission to mention the disease, the LA had been suffering from, in the proposal form is material or not and whether it amounts to suppression of material facts.
At the time of filing proposal form, he suppressed material facts regarding his health and answered the question in negative regarding his health as per annexure R2, (“step 3 Life Style Details” & “Step 4 Health Details”) and mentioned that he was keeping good health. It was a material fact which was not disclosed by him at the time of taking of Insurance Policy. It was the life assured who was entirely responsible for furnishing his personal history with accuracy and truthfully answering the specific question relating to the status of his health.
It is further found that the insured person was under the treatment of Dr. R.K.Agarwal since 2008 (vide Annex R4).
Having regard to entire facts and circumstances of the case, we are also convinced to hold that the proposer/LA has suppressed material facts which hit to the very root of the contract of insurance so far it relates to the decease like Dilated Cardio Myopathy, Moderately severe Left Ventricular Systolic Disfunction, Dilated Left Ventricular, Right Atrium, Left Atrium and Mild Pulmonary Arterial Hypertension the LA was suffering from who died due to Cardio Respiratory failure which has a co relation with the aforesaid decease the LA had been suffering from (vide Annex R7).
We also find from the record that during the continuation of the said insurance policy, the proposer under gone for a further treatment at AIIMS (vide Annex R5) and CMC, Velore (Vide Annex R6), the treating doctors confirmed that the patient was suffering from Dilated Cardio Myopathy, which has been detected in the year 2008. Thus it was a case of deliberate concealment of material facts having bearing on the contract of Insurance. The respondent was therefore, justified in repudiating the claim on the ground that the material fact was suppressed by the assured at the time of taking the insurance policy.
It is admitted that after the death of the life assured the complainant being the nominee claimed the policy coverage /benefit of Rs. 9,73,050/- as per policy condition (Annex 6). The O.P. considering the same sent a letter informing that “ Rs. 1,16,809/- has been credited to the account of the complainant through NEFT as per liability for payment of account value at the time of intimation.(Annex 7).
So we are of the opinion that the complainant failed to prove her case as there has been suppression of material facts. We hold that the complainant is not entitled to litigation cost or any compensation because we find no deficiency in rendering service by the O.P. The point under consideration is accordingly disposed off. Hence,
ORDERED
That the Consumer Complaint No. 37 of 2014 be and the same is dismissed on contest but without any cost.
Let a copy of this judgement be supplied to the parties free of charge.
