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PUNJAB STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice A.L. Bahri, President &
Mr. Jasbir Singh, Member
NATIONAL INSURANCE COMPANY LIMITED—Appellant
versus
VINAY KUMAR SEHGAL—Respondent
Appeal No. 333 of 1997—Decided on 9.12.1998
Counsel for the Parties :
For the Appellant : Mr. Ramesh Kumar, Authorised Representatie.
For the Respondent:Mr. Pardeep Bedi, Advocate.
An insured is required to disclose all material facts about his health at the time of taking an insurance policy, and failure to do so may result in the repudiation of the claim.
Headnote:
INSURANCE - MEDICLAIM POLICY - CONCEALMENT OF MATERIAL FACTS - SECTION 45 OF THE INSURANCE ACT, 1938 - SUMMARY
Fact of the Case:
The complainant, Vinay Kumar Sehgal, had taken a mediclaim policy from the appellant, National Insurance Company Limited, on July 16, 1990. He underwent bypass surgery on December 2, 1990, and claimed Rs. 87,200/- as medical expenses under the policy. The Insurance Company repudiated the claim on the ground that the complainant had concealed the fact that he was suffering from heart disease prior to the issuance of the policy.
Finding of the Court:
The District Forum allowed the complaint and directed the Insurance Company to pay Rs. 87,200/- along with damages and costs. The Insurance Company challenged the order before the State Commission.
Issues: Whether the complainant had concealed material facts about his health at the time of taking the policy.
Ratio Decidendi: The State Commission held that the complainant had concealed the fact that he had suffered a heart attack on June 21, 1990, which was a material fact that should have been disclosed to the Insurance Company. The Commission relied on the records of the Escorts Heart Institute, where the complainant had taken the treatment, which showed that he was a known case of ischemic heart disease since June 21, 1990.
Final Decision: The State Commission allowed the appeal and set aside the order of the District Forum.
Mr. Justice A.L. Bahri, President— National Insurance Company Limited challenges order of District Forum, Jalandhar dated December 31, 1996 in this appeal whereby a direction was given to the appellant to pay Rs. 87,200/- alongwith Rs. 3,000/- damages and Rs. 1,000/- as costs of litigation to the complainant Vinay Kumar Sehgal.
2. Vinay Kumar Sehgal, approached the District Forum claiming Rs. 99,000/- (Rs. 87,200/- as medical expenses and Rs. 11,800/- special damages). He was working as Divisional Manager of M/s. Northern India Sales Corporation at Jalandhar. The aforesaid Corporation is owned by M/s. Usha International Limited. Since 1986 he had been taking insurance cover (Mediclaim Insurance Policy) from the opposite party, National Insurance Company. The details of the policies taken were mentioned in para 2 of the complaint. Last of the policies taken was on May 19,1989. Thereafter the policy in dispute was taken on July 16,1980 for a year. On December 14,1990 he went to Escorts Heart Institute, Delhi for check up. On the following day surgery was advised, which was actually performed on December 2, 1990 (bye-pass surgery). As per details given in para 3 of the complaint, he spent Rs. 87,200/- on the surgery. Further details of Rs. 86,500/- were given in para 4 of the complaint that for check-up Rs. 1,500/-, for Angiography package Rs. 10,000/- and for surgery Rs. 75,000/- were spent. In fact he had felt pain while on tour on December 12,1990 and had to visit the Escorts Hearts Institute. Since the opposite party avoided making payment of the aforesaid amount, District Forum Was approached with the complaint. The Insurance Company submitted its reply denying its liability. It was alleged that the complainant was suffering from heart disease prior to the issuance of the insurance policy on July 16,1990. He concealed this fact from the Insurance Company before obtaining the policy. Since June 21,1990 he was a known case of heart disease. The complainant fully knew about the existence of this disease when he submitted proposal form for policy in dispute. Thus for valid reason aforesaid the mediclaim of the complainant was repudiated by the Insurance Company. From July 16,1990 to July 15,1991, the complainant was not under the cover of mediclaim policy. Thus, it would appear that on June21, 1990 when he suffered from heart ailment, he was not covered under the policy. Information of repudiation of the claim was given to the complainant on February 14, 1992. Since the claim was repudiated there was no deficiency in rendering service on the part of the Insurance Company. The complainant was playing hide and seek game with the Court. He had no other reason of concealing the fact that his claim already stood repudiated before filing the complaint. Because of the disputed facts and circumstances, the complaint should be relegated to his remedy in the Civil Court. In the complaint no allegations were made regarding repudiation of the claim. The complainant wanted to play fraud on the Insurance Company by obtaining policy concealing the factum of heart ailment. On merits also, similar pleas were taken.
3. The complainant produced his evidence by way of affidavit dated July 25,1996. On behalf of the Insurance Company affidavit of Joginder Singh, Divisional Manager and attorney of National Insurance Company was filed. These witnesses have reiterated the stand taken up in the pleadings referred to above. The District Forum on the material produced passed the impugned order.
4. Entering into a contract of insurance is outcome of faith and bona fides of the parties and if attempt is made by the insurer to defraud the Insurance Company by concealing material facts about his health, the contract of insurance would be frustrated. This is all has happened in the present case. The Insurance Company vide repudiating the claim relied upon the records of the Escorts Heart Institute from where the complainant had taken the treatment and had spe
