Haryana

StateCommission

A/735/2016

ICICI PRU.LIFE INSURANCE CO. - Complainant(s)

Versus

VASU DEV SHARMA - Opp.Party(s)

HITENDER KANSAL

11 Jan 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :     735  of 2016

Date of Institution:      10.08.2016 

Date of Decision :       11.01.2017

1.      M/s ICICI Prudential Life Insurance Company Limited, ICICI Prulife Towers, 1089, Appasaheb Marathe Marg, Prabha Devi, Mumbai 400 025, through its Regional Manager/Principal Officer.

2.      M/s ICICI Prudential Life Insurance Company Limited, 1^st Floor, Plot No.55, B.P. Neelam Bata Road, Faridabad-121001, through its Divisional Manager/Principal Officer.

                                      Appellants-Opposite Parties

Versus

Vasu Dev Sharma s/o Sh. Bhoodev Prasad Sharma, Resident of House No.A/MCF-368, Subhash Colony, Ballabgarh, District Faridabad.

                                      Respondent-Complainant

 

CORAM:             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member   

 

Argued by:          Shri   Hitender Kansal, Advocate for appellants.

                             Shri S.K. Tripathi, Advocate for respondent.

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          This Opposite Parties’ appeal is directed against the order dated May 26^th, 2016 passed by District Consumer Disputes Redressal Forum, Faridabad (for short ‘the District Forum’) in Consumer Complaint No.620 of 2010.

2.                Neelam (since deceased) wife of Vasu Dev Sharma-complainant/respondent obtained four life insurance policies from   ICICI Prudential Life Insurance Company Limited (for short ‘ICICI Prudential’)-Opposite Parties (appellants herein) the details of which are given below:-

Sr.No.	Name of Policy	No.& Term	Insured Period	Sum Assured
1.	Life Stage RP	09263127 10 Yrs	26.06.2008               to 26.06.2018	Rs.1,50,000/-
2.	Life Stage Assure	10147065 15 Yrs	10.10.2008           to 10.10.2023	Rs.1,50,000/-
3.	Hospital Care with Life Stage Assure	10155528 10 Yrs	11.10.2008         to 11.10.2018	Rs.1,50,000/-
4.	Life Stage Assure	12004244 15 Yrs	11.06.2009           to 11.06.2024	Rs.1,50,000/-

   

3.                The Life Assured-Neelam Sharma died on 18^th September, 2009. Claim being filed, the ICICI Prudential repudiated claim vide letter dated 28^th October 28^th, 2010 (Exhibit R-13) repudiated the same on the ground that the Life Assured was a known case of Diabetes Mellitus and was hospitalized in November, 2006 and was diagnosed of “Right Frontal and Corpus Callosum Glioma with Left parasaggital Convexity Meningioma.” However, this fact was not disclosed by the Life Assured in the Proposal Forms at the time of taking the policies. Hence, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum.

4.                Notice being issued, the ICICI Prudential-Opposite Parties contested complaint by filing written version while reiterating the fact stated in the repudiation letter and prayed for dismissal of the complaint.

5.                After evaluating the pleadings and evidence of the parties, the District Forum vide impugned order observed that under policy No.10155528, the Life Assured was not entitled to any claim as it was a health care policy. With respect to the remaining three policies, that is, Policy Nos.09263127, 10147065 and 12004244, the complaint was allowed directing the opposite parties as under:-

“10.   Opposite Parties are directed jointly and severally, to pay assured sum of Rs.4,50,000/- alongwith interest @ 9% p.a. from the date of filing of present complaint till realization of amount and Rs.5500/- as compensation for mental tension, agony as well as harassment besides Rs.2200/- as litigation expenses to the complainant within 30 days from the date of receipt of this order.”

6.                Learned counsel for the appellants-Opposite parties assailed the order of the District Forum while referring to the proposal forms (Annexure A-1 to A-4) wherein she gave answers to the relevant questions, that is, question Nos.22(a), 23(c), 23(d), 23(f), 23(h) (i),(vi) in the negative with respect to her state of health whereas in fact prior to the purchase of the policies, she was hospitalized in November, 2006 and was diagnosed of “Right Frontal and Corpus Callosum Glioma with left parasaggital Convexity meningioma” and was also suffering from Diabetes Mellitus. The Life Assured also underwent craniotomy and excision of the lesion during the above said hospitalization. Reference was made to Discharge Summary issued from Escorts Hospital and Research Center Limited, Faridabad dated 7^th December, 2006 (Annexure A-5), Indoor Admission card dated 23^rd November, 2006 (Annexure A-6), History Sheet from Escorts Hospital and Research Center Limited, Faridabad  dated 23^rd November, 2006 (Annexure A-7), Consultation Form dated 24^th November, 2006 (Annexure A-8), Consultation Form dated 25^th November, 2006 (Annexure A-9), Operation Note dated 23^rd November, 2006 (Annexure A-10) and Medical Attendant’s/Hospital Certificate dated 1^st December, 2009 (Annexure A-11).

7.                As per Discharge Summary dated 7^th December, 2006 (Annexure A-5) issued from Escorts Hospital, the patient Neelam Sharma was diagnosed as “Right frontal and corpus callosium glioma (Biopsy awaited) with left parasaggital convexity miningoma”.  Right frontal craniotomy with excision of the lesion was done under GA on 27^th November, 2006.

8.                In the Proposal Forms (Annexure A-1 to A-4) the Life Assured had given answers in negative to the relevant questions with respect to her state of health. Thus, the Life Assured concealed material fact while giving answers to the questions in the proposal forms and played fraud with the ICICI Prudential-Opposite Parties.

9.                It is well settled principle of law that the contract of insurance is based on the principle of utmost faith–uberrima fides and the insurer can repudiate the insurance claim if it finds that the policy was purchased by the life assured on mis-statement and by concealment of true fact regarding his/her health.

10.              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………….”

11.              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.  ………..”

12.              In Ratan Lal & Anr. V. Metropolitan Insurance Co. Ltd., 1959 AIR (Patna) 413 it was held as under:-

“5.     The well-settled law in the field of insurance is that contracts of insurance including the contracts of life assurance are contracts uberrima fides and every fact of materiality must be disclosed otherwise there is good ground for rescission. And this duty to disclose continues up to the conclusion of the contract and covers any material alteration in the character of the risk which may take place between proposal and acceptance”.

13.              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…..”  

14.              Hon’ble National Commission in Life Insurance Corporation of India & Anr. versus Bimla Devi, I(2016) CPJ 57 (NC), held as under:-

“17. The term "material fact" is not defined in the Act and, therefore, it has been understood and explained by the Courts in general terms to mean as 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 involved would be "material".

18. As stated in Pollock and Mulla's Indian Contract and Specific Relief Acts any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact.

20. The 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 for the purpose of entering into a Contract of Insurance.”

15.              The evidence produced on the record established that the life assured was suffering from Brain Tumor prior to the purchase of the policy and was not having good health; thus the life assured suppressed the material fact regarding her state of health.  So, in view of the law enunciated above, this Commission is of opinion that LIC was justified in repudiating complainant’s claim.  The District Forum fell in error in allowing the complaint and as such the impugned order cannot be allowed to sustain. 

16.              In view of the above, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

17.              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: 11.01.2017

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

CL