Haryana

Karnal

298/2012

Tara Chand S/o Chatru - Complainant(s)

Versus

Tata AIG Life Insurance Co. - Opp.Party(s)

Sh. Kuldeep Singh

26 Apr 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                               Complaint No.298 of 2012

                                                               Date of instt.11.06.2012

                                                               Date of decision:26.04.2016

 

Tara Chand son of Shri Chatru resident of village Barsat, tehsil Gharaunda, District Karnal.

 

                                                                   ……..Complainant.

                                      Versus.

The Branch Manager, Tata AIG Life Insurance Company Ltd. Sector-12, Karnal.

 

                                                                   ………… Opposite Party.

                     Complaint u/s 12  of the Consumer Protection Act.

 

Before                   Sh.K.C.Sharma……….President.

                   Sh.Anil Sharma…….Member.

 

Present:      Sh.Rishi Pal Rana Advocate for the complainant.

                   Sh.Narinder Sukhan Advocate for opposite parties.

 

 ORDER:

 

                   This complaint has been filed by the complainant u/s 12 of the Consumer Protection Act 1986, on the averments that her mother Shanti Devi(deceased life assured) purchased a life insurance policy no.U116341789 dated 29.6.2010 from the opposite party and the assured sum was Rs.2,25,000/-. Unfortunately, the deceased life assured expired on 24.8.2010. After her death, he lodged claim with the opposite party and submitted the required documents. Initially, the opposite party postponed the matter on one pretext or the other, but vide letter dated 3.5.2011 repudiated the claim on the ground that the deceased life assured was suffering from Tuberculosis before purchasing the policy. The repudiation of the claim by the opposite party was illegal and without any basis, therefore, the same amounted to deficiency in service on the part of the opposite party, which caused him mental pain and harassment apart from financial loss.

2.                Notice of the complaint was given to opposite party, who appeared and filed written statement controverting the claim of the complainant on various grounds. Objections have been raised that the complaint is not maintainable; that the complaint has no cause of action and that the complaint is baseless and has been filed by the complainant with malafide intention.

                   On merits, it has been submitted that the deceased life assured submitted the proposal form dated 22.6.2010 for obtaining the policy and in the said proposal form questions no.5 and 7 in step 8B relating to her health were replied in negative. She had also made declaration under step 9 of the proposal form after fully understanding the terms and conditions of the policy. However, during the course of investigation, it was found that she was suffering from Tuberculosis prior to submission of the proposal form and such material fact was not disclosed by her despite specific questions asked in the proposal form. Thus, the policy was obtained by the deceased life assured by  mis-representation of the fact. Therefore, the claim of the complainant was rightly repudiated and there was no deficiency in service on the part of the opposite party.

3.                In evidence of the complainant, his affidavit Ex.C1 and documents Ex.C2 to C9 have been tendered.

4.                On the other hand, in evidence of the opposite party, affidavit of Rahul Dhanotia, Legal Manager Ex. OP1/A  and documents Ex.OP1 to Ex.OP4 have been tendered.

5.                We have appraised the evidence on record, the material circumstances of the case and the arguments advanced by the learned counsel for the parties.

6.                There is no dispute between the parties regarding fact that the deceased life assured obtained a life insurance policy from the opposite party for a sum of Rs.2,25,000/- commencing from 29.6.2010 and she expired on 24.8.2010. The complainant being son of the life assured submitted the claim  with the opposite party, but his claim was repudiated on the ground that the deceased life assured was suffered from tuberculosis prior to submission of the proposal form for obtaining the policy, but she concealed that fact, despite specific questions asked in the proposal form.

7.                Learned counsel for the complainant put a great thrust on the contention that the deceased life assured was illiterate, whereas the application/proposal form was in English, which was filled up by the agent of the opposite party. The said proposal form was not read over and explained to the deceased life assured before obtaining her thumb impressions. In fact, she did not conceal any fact and disclosed all the material facts to the agent of the opposite party, who filled up the form, but it appears that the agent  intentionally did not mention all the necessary facts disclosed by the deceased life assured, in the proposal form for the reasons best known to him. Therefore, it cannot be said that the deceased life assured concealed material facts while submitting the proposal form for obtaining the policy and the complainant cannot be denied the benefits of the policy on the alleged ground of concealment of material fact by the deceased life assured.

8.                On the other hand learned counsel for the opposite party vehemently argued that contact of insurance is a contract uberrima fides and utmost faith must be observed by the contracting parties. Every material fact must be disclosed, otherwise there is good ground for rescission of contract. Concealment of previous ailment is a suppression of material fact. However, the deceased life assured in the proposal form, the copy of which is Ex.OP1, concealed that she was suffering from tuberculosis at the time of submitting the proposal form and getting treatment under Revised National Tuberculosis Control Programme Haryana, as is evident from Ex.OP4. Therefore, the claim of the complainant was rightly repudiated by the opposite party. In support of his contention, he placed relied upon Satwant Kaur Sandhu Versus New India Assurance company IV (2009) CPJ 8 (SC)  and Life Insurance Corporation of India and another Versus Bimla  Devi revision petition no.3806 of 2009 decided by Hon’ble National Commission on 12.8.2015. Learned counsel for the opposite party further argued that the proposal form was read over and explained to the deceased life assured and she put her thumb impressions thereon after understanding the contents and admitting the same to be correct. Mr. Gaurav Ghalyan, who filled up the proposal form signed declaration that the proposal form was read over and explained to the deceased life assured, therefore it cannot be said that the deceased life assured had disclosed all the necessary facts to the said agent and he intentionally did not mention about her disease in the proposal form.

9.                 In Satwant Kaur Sandhu’s case (Supra)   the policy holder was suffering from chronic diabetic renal failure, but that fact was not disclosed while obtaining the policy. It was held by the Hon’ble Supreme Court that term “material fact” is not defined in the Insurance Act and therefore, it has been understood and explained by the courts in general term to mean as any  fact which would influence the judgment of a prudent insurer in fixing 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 involved would be material.   As cited in Pollock and Mulla’s Indian Contract and Specific Relief Act any fact, the knowledge or ignorance of which would materially influence an insurer in making contract or estimating the degree and character of risk in fixing rate of premium is a material fact. If, the proposer   has knowledge of  such facts, he is obliged to disclose it  particularly while answering the questions in the proposal form. Needless to emphasis that any inaccurate answer will entitle to insurer to  repudiate his liability, because there is clear term that information sought for in the proposal form is material for the purpose of a entering into a contract of Insurance. It was further held that contract of insurance is a uberrima fide meaning a contract of utmost good faith of the assured.  Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. 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 fact which are known to the applicant and not  what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. In Bimla Devi’s case (Supra)  the deceased had undergone an operation for right kidney stone on 18.5.1998 and had availed medical leave for 46 days i.e. from 16.5.1998 to 30.6.1998.The deceased had also taken treatment from Apollo Hospital, New Delhi. The claim was repudiated by the Corporation on the ground that deceased had concealed vital facts regarding his health at the time of making proposal for insurance.  Therefore, the complainant was not entitled to any claim under the policy. It was held by Hon’ble National Commission that  upshot of the entire discussion is that in a contract of Insurance  any fact which   would influence the mind of a prudent insurer in deciding whether to accept or not to accept 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 emphasise 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 fact  for the purpose of entering into a contract of insurance.  Under the facts and circumstances of the case, it was held that it was clear that the insured had suppressed the material  information about the procedure   he had  undergone in 1998  and his  medical condition thereafter, therefore, the claim was rightly repudiated.

10.              The facts of the present case are to be analyzed, keeping in view the proposition of law laid down in the afore discussed authorities. Step 8B in the proposal form is regarding health details of the life assured/ proposer. Questions no.5 and 7 asked from the life assured and reply given by her are reproduced as under:

          Health Declaration of Life Insured

5                 Have you ever had any of the following:-

          (e)     Asthma, pneumonia, tuberculosis, emphysema, coughing up blood, persistent cough of any other disorder of the chest or lungs.  (No)

7.                In the last 5 years, have you attended any doctor or any another medical facility for investigation or diagnostic tests ( such as X-ray, ultrasound, CT scan, biopsy, ECG, blood or urine etc. (No).

                   Thus, it is emphatically clear that the deceased life assured did not disclose about the treatment of tuberculosis with which she was suffering prior to submission of the proposal form. She even did not disclose about getting treatment from any doctor during last 5 years. The copy of the treatment record Ex.R4 clearly establishes that the deceased life assured got treatment for tuberculosis under Revised National Tuberculosis Control Programme Haryana and card in that regard was issued to her. She had been getting treatment for tuberculosis since March 2009. In fact, the deceased life assured was bound to disclose all the material facts regarding condition of her health under the proposal form. She knowingly concealed that she was getting treatment for tuberculosis. The argument of the counsel for the complainant cannot be accepted that being illiterate she did not know about contents of the proposal form, the questions asked from her and the reply mentioned therein. Had she disclosed about her disease of tuberculosis there could be no question of the concealing such facts in the proposal form by the agent. Had she disclosed about  the problem of tuberculosis, the opposite party might refuse to issue the insurance policy to her or might charge some extra amount for issuing the policy. Under such circumstances, the complainant has not been able to establish that there was any deficiency in service on the part of the opposite party.

12.              As a sequel to the foregoing reasons, we do not find any merit in the present complaint. Therefore, the same is hereby dismissed. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 26.4.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member