Heard learned counsel for the appellant.
2. Captioned appeal is filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.
3. The case of the complainant in nutshell is that the complainant’s wife has purchased a policy for a sum assured at Rs. 8,00,000/- on 9.5.2005 with an accidental benefit. It is alleged inter alia that the policy holder died on 9.7.2008 due to heart failure. Thereafter, claim was made to the opposite party but it was repudiated on the ground of suppression of material facts. Being aggrieved with such repudiation, the complaint was filed.
4. The opposite party filed the written version stating that the policy holder was a chronic heart patient and suffering from Diabetis and was undergoing treatment in different hospitals prior to the taking up the policy. She has suppressed the material fact of her pre-existing disease before filling up the proposal form. It is also stated that the policy has lapsed due to non-payment of the policy amount due on 5/2006 and on her submission of health declaration, it was revived on 14.11.2006. In the revival declaration, she has suppressed the fact of her previous ailments and hospitalisation. Therefore, they have repudiated the claim of the complainant.
5. After hearing the parties, learned District Forum have passed the following order:-
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“ The petition of the complainant is allowed on contest against the O.P. The complainant is entitled to Rs. 8,00,000/- ( Rupees Eight Lakhs) against the Policy No. 570972877 along with the bonus etc. Attached to the said policy. Since the assured has availed a loan of Rs. 73,000/- against the policy on 3.11.2007 the said loan amount with interest be deducted out of the said claim amount and paid to the complainant within two months from the date of receipt of this order, failing which the said amount shall carry interest of 9% per annum from the date of repudiation till its final payment.
In the circumstances, there will be no order for cost or compensation.”
6. Learned counsel for the appellant strenuously argued that the policy holder died within two years of the revival of the policy and as such they have investigated the matter and found that the policy holder has suppressed the previous disease of heart ailment and Diabetis. Therefore, they have repudiated the claim. He also argued that Section 45 is clear to show that within two years of the policy if at all it is recalled on the ground of suppression of material fact of previous diseases, the consumer complaint will not maintainable. Since they have proved the previous diseases, learned District Forum has committed error in law by not considering their plea and materials on record. Therefore, he submitted to set aside the impugned order by allowing the appeal.
7. Considered the submissions, perused the D.F.R. and the impugned order.
8. It is admitted fact that the policy holder had purchased a policy on 9.52005. It is also available from the material on record that the policy was revived on 14.11.2006 and the policy holder died on 9.7.2008. The question now arises as to whether the policy in question can be called under Section 45 of the Insurance Act. Section 45 of the Insurance Act, 1938 is as follows:-
“45. 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 the 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 the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that 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.”
9. The above provision is clear to show that any policy can be called in question on any ground within two years from the date of the policy commenced. In the instant case, learned counsel for the appellant submitted that the policy was revived on 14.11.2006 by giving fresh declaration about the health and thereafter he died within two years of revival and as such, Section 45 is applicable in this case.
10. Hon’ble Apex Court in Mithoolal Nayak vrs. Life Insurance Corporation of India, AIR 1962 814 where Their Lordships have culled out the following three conditions to be considered before calling the policy in question.
(a) the statement must be on a material matter or must suppress facts which it was material to disclose;
(b) the suppression must be fraudulently made by the policy holder; and
(c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.”
11. The aforesaid view has been followed by another judgment of the Hon’ble Supreme Court of India in Reliance Life Insurance Co. Ltd. & Anr. Vrs. Rekhaben Nareshbhai Ratho, 2019 (6) SCC 175 where Their Lordships held as follows:-
“19. In Mithoolal (supra), a Bench of three learned Judges of this Court dealt with a case where a policy had been issued on 13 March, 1945. The policy came into effect from 15 January, 1945. The amount insured was payable after 15 January, 1968 or at the death of the insured, if earlier. The insurer repudiated its claim on 10 October, 1947. Hence the provisions of Section 45 were applicable. The three Judge Bench rejected the submission that a period of two years had not expired from the date of revival of the policy, holding that from Section 45 it was evident that the period of two years can only mean the date on which the policy was effected. From that date a period of two years had clearly elapsed when the insurer repudiated the claim. The significance of the decision in Mithoolal (supra) for this case lies in the fact that the Court specifically kept open the issue about what would govern a case where Section 45 did not apply.
12. From the aforesaid decision, it is very clear that in the pre-amended provision Section 45 of the Insurance Act, 1938, date of revival of the policy will not be counted, but the policy with the original date when commenced is the date which would be taken as a test for counting two years by the date she died. In this regard, we can also go through the new amended provision of Section 45 of the Insurance Act. which got amended in December, 2014 and therefore, three years to be counted from the date of revival but no such provision is there in Section 45 of the pre-amended of the Insurance Act. As such, we are of the view that in view of the decisions of the Hon’ble Supreme Court of India, Section 45 of Insurance Act in the instant case will not be applicable because the policy holder died on 9.7.2008 whereas the policy originally came into effect on 9.5.2005 irrespective of the fact that it is revived on 14.11.2006. When Section 45 of the Insurance Act cannot be pressed into service, further provision with regard to suppression of material fact does not arise.
13. In view of the aforesaid discussion, there is nothing to interfere with the impugned order passed by the learned District Forum and accordingly, the same is confirmed.
14. The appeal is devoid of any merit and accordingly dismissed. No cost.
DFR be sent back forthwith.
Supply free copy of this order to the respective parties or the copy of this order be downloaded from Confonet or Website of this Commission to treat same as copy supplied from this Commission.
