This revision petition has been filed by the petitioner M/s. Reliance Nippon Life Insurance Co. Ltd. against the order dated 04.09.2017 of the State Consumer Disputes Redressal Commission, (in short ‘the State Commission’) passed in FA No.439 of 2015.

2.      Briefly put, facts relevant for the disposal of the present revision petition are that the father of the complainant/respondent Appa Rao obtained a Life Insurance Policy during his life time from the opposite party/petitioner for a sum of Rs.5, 00, 000/-. Complainant/Respondent was appointed as the nominee under the said policy. On 10.3.2011, insured suffered from Diarrhea. He was shifted in a hospital in Visakhapatnam. Therein, Dr. BD Naidu prescribed some medicines to him. On the same night, insured died and intimation of his death was given to the opposite party/petitioner. Complainant/respondent submitted the claim with necessary documents. However, opposite party/petitioner repudiated the claim on the ground of non-disclosure of material facts about the health. Complainant filed a consumer complaint CC/374/2012 in the District Forum, Visakhapatnam against the Opposite Parties for directing them to pay an amount of      Rs.5,00, 000/- along with interest from the date of claiming the amount till its payment and Rs.50, 000/- towards compensation with costs.

3.      Opposite parties submitted their written statement and denied the material averments in the complaint. Though it has been admitted that the deceased Appa Rao has obtained Life Insurance Policy for Rs.5,00,000/- and that he died on 10.03.2011 the claim was received by the Insurance Company on 17.02.2012. Opposite party justified  repudiation of the claim on the ground that Insurance Policy was obtained by concealing the material fact that the deceased life assured (DLA) was hospitalized much prior to the signing of the proposal form.

4.      District Forum vide its order dated 02.07.2015 held that the OP has repudiated the claim of the complainant on the ground that insurance was obtained by the deceased by concealing the fact that he was hospitalized and treated for Cerebrovascular accident. Onus of proving the above ground of repudiation of insurance claim lies with the OP but they failed to prove the same. As OP has failed to prove its part of the case there has been clear deficiency of services on the part of the OP. Therefore, complainant is entitled for the relief for an amount of Rs.5, 00, 000/- with interest @ 9% pa from the date of May, 2012 i.e. after receiving the repudiation letter from OP, compensation of Rs.25, 000/- and costs of Rs.2500/-.

5.      Aggrieved by the order of the District Forum, opposite party preferred an appeal before the State Commission. The appeal was dismissed by the State Commission. OP heavily relied on the report of the investigator but State Commission found that there was nothing on record to prove about the said report and no credibility can be attached to it. State Commission agreed with the reasoning put forward by the District Forum that the appellant utterly failed to prove that the insured was suffering from ailment and that he suppressed any information in the proposal form.  State Commission did not find any valid reason to reject the claim of the complainant. Order of the District Forum was upheld by the State Commission.

6.      Hence this Revision Petition.

7.      It has been argued that during the course of investigation it came to knowledge of the petitioner through the hospital treatment records (i.e. prior to the signing of the proposal form) that Life Assured was a known case of Cerebrovascular Accident and was treated for Cerebrovascular accident since 2009 in Krishi Trust Hospital, Sheelanagar, Visakhapatnam-12.  The deceased was hospitalized for the above said disease during the month of January, 2009 i.e. much before taking up the policy.  The petitioner has produced the original hospital records, which clearly establishes that the DLA had a pre-medical history which was intentionally suppressed while filling the proposal form.  Hence, the claim was rightly repudiated by the petitioner in accordance with the terms of the policy contract and as per the principles of Insurance Law.    Learned counsel further stated that the learned Forum by not considering the investigation report has acted in contravention to the law and hence the impugned order is liable to be quashed only on this ground alone.  It was submitted that investigation is a right conferred under clause 8(3) of IRDA (Protection of Policy Holders Interest) 2002 which reads as under:-

“8.   Claims procedure in respect of a life insurance policy

(1) ……..

(2) ………

(3)   A claim under a life policy shall be paid or be disputed giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required. However, where the circumstances of a claim warrant an investigation in the opinion of the insurance company, it shall initiate and complete such investigation at the earliest.  Where in the opinion of the insurance company the circumstances of a claim warrant an investigation, it shall initiate and complete such investigation at the earliest, in any case not later than 6 months from the time of lodging the claim.”

8.      It has been further argued that petitioner has rightly repudiated the claim of the respondent, in view of the law laid down by the Hon’ble Supreme Court  in the case of Satwant Kaur Sandhu V. New India Assurance Co. Ltd. reported in (2009) 8 SCC 316, wherein the Apex Court has held 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.  It was submitted that the fact that the DLA was known case of Cerebrovascular Accident was a material fact for the petitioner, for arriving at a decision whether to issue the said policy or not and if yes, at what premium, etc.  Thus, the DLA by concealing the material facts with respect to his medical history induced the petitioner to issue the said policy in his favour and hence, the petitioner rightfully repudiated the claim of the respondent. 

9.      I have carefully considered the arguments advanced by learned counsel for the petitioner and have examined the material on record.  It is seen that the investigator has not recorded any statement of the daughter who said that her father died due to paralysis and he was treated at hospital at Vizag.  Investigator recorded the statement of son who is the nominee under the policy and who stated that the insured died of heart attack.   The cause of death as given by Dr. B.D.Naidu, who was treating the DLA just before the date of death is gastroenteritis and diarrhea.  Obviously, doctor, who was treating the patient on the date of death, would be in a better position to assess cause of death.  As no post-mortem was conducted, the cause of death given by the treating doctor has to be believed, therefore, the cause of death has to be taken as gastroenteritis and diarrhea. First of all, assertion of the Insurance Company that the death occurred due to paralysis, which was being treated is not supported by any statement of the daughter of the deceased, moreover, the State Commission has mentioned that the concerned hospital has submitted the treatment details in this regard which does not corroborate the assertion of the insurer.  It was the treatment record of some other person. In this regard, the State Commission has observed the following:-

“15.   Be that as it may, in order to demolish the allegation of suppression of the insured receiving treatment, the complainant filed a petition in I.A No.221 of 2014 to issue summons to the hospital for production of records.  The hospital produced the record and the same was marked as Ex.A8.  The report submitted by the Chief Administrative Officer stated that there was no record of treatment on 27.02.2009 when the insured is alleged to have received treatment.  The Chief Administrative Officer enclosed a copy of the concerned record and after verifying the same we find the name of one Mr. P. Appa Rao of Kothuru village against ID No.323.  Admittedly the said P.Appa Rao is a different person of a different village and not the insured Yellapu Appa Rao who was the resident of Thimmarajupeta village.  The appellant did not take any steps to contradict the statement of the Chief Administrative officer or the record submitted by him.  It is therefore, demonstrably clear that the appellant utterly failed to prove that the insured was suffering from ailment and he suppressed the same in the proposal form.”

10.    The State Commission has also recorded that these facts were not controverted by the Insurance Company before the State Commission.  Even in the grounds of revision petition, no ground has been taken by the Insurance Company that the finding of the State Commission regarding the truthfulness of the medical record is not correct.  Thus, if the finding of the State Commission is not challenged, it is to be taken as correct.  It means that the medical record presented by the hospital related to some other Appa Rao and not related to the DLA.  In these circumstances, the whole report of the investigator stands demolished and no reliance can be placed on the same.

11.    Otherwise also, the DLA has been alleged to be suffering from paralysis and the actual cause of death has been found to be gastroenteritis and diarrhea and the two are not apparently related to each other.  The Hon’ble Supreme Court in Sulbha Prakash Motegaonkar And Ors. Vs. Life Insurance Corporation of India, Civil Appeal No.8245 of 2015, decided on 05.10.2015 (SC) has held the following:-

“It is not the case of the Insurance Company that the ailment that the deceased was suffering from was a life threatening disease which could or did cause the death of the insured.  In fact, the clear case is that the deceased died due to ischaemic heart disease and also because of myocardial infarction.  The concealment of lumbar spondylitis with PID with sciatica persuaded the respondent not to grant the insurance claim.

        We are of the opinion that National Commission was in error in denying to the appellants the insurance claim and accepting the repudiation of the claim by the respondent.  The death of the insured due to ischaemic heart disease and myocardial infarction had nothing to do with this lumbar spondylitis with PID with sciatica.  In our considered opinion, since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified.”

12.    The above judgment of the Hon’ble Supreme Court is equally applicable in the present case.  Even if one leaves the factual finding of the State Commission that the treatment records submitted by the hospital related to some other Appa Rao and not to the DLA, the cause of death had no relation with the alleged pre-existing disease of paralysis and in the light of judgment of the Hon’ble Supreme Court in Sulbha Prakash Motegaonkar And Ors. Vs. Life Insurance Corporation of India, (supra), the claim cannot be repudiated.  

13.    On the basis of the above discussion, I do not find any illegality, material irregularity or jurisdictional error in the order dated 04.09.2017 of the State Commission which calls for any interference from this Commission.  Accordingly, the revision petition No.3502 of 2017 is dismissed at the admission stage.