IMPORTANT POINT
Assured is under solemn obligation to make true and full disclosure of information about his health condition.

Dr. B.C. Gupta, Presiding Member—This revision petition has been filed by the complainant , Smt. Phoola Devi under Section 21(b) of the Consumer Protection Act, 1986, against the impugned order dated 7.4.2011, passed by the Haryana State Consumer Disputes Redressal Commission, Panchkula (hereinafter referred to as the ‘State Commission’) in appeal no.2537/2005, Life Insurance Corporation of India vs. Smt. Phoola Devi, vide which, while allowing the said appeal, the order passed by the District Consumer Disputes Redressal Forum, Sirsa on 17.11.2005 in Consumer Complaint no.412/2004, filed by the present petitioner, allowing the said consumer complaint, was set aside and the consumer complaint was ordered to be dismissed.

2. The factual matrix of the case says that the petitioner, Smt. Phoola Devi is the wife of Late Nagarmal Modi, who filed proposal form with the respondent Life Insurance Corporation of India (LIC) for obtaining two insurance policies of Rs.5 lakhs each in his name. The LIC issued one policy, bearing no.173132560 for an assured sum of Rs.5 lakh and anther policy bearing no.173132559 for an assured sum of Rs.2.75 lakhs. During the subsistence of the said policies, the said Nagarmal Modi died on 26.7.2003, due to heart attack. The complainant being nominee under the policy and wife of the deceased, gave due intimation regarding his death to the LIC and submitted the claim form, after completing the required formalities. The claim was however, repudiated by the LIC on the ground that the insured had been suffering from diabetes and kidney problems for the last 22 years, but the said facts were concealed from the LIC at the time of obtaining the insurance policies. The consumer complaint in question was then filed, seeking directions to the LIC for payment of the assured sum under the policies of all permissible benefits alongwith interest @ 18% per annum. In addition, a compensation of Rs.50,000/- against mental harassment and Rs.6,000/- as litigation cost was also demanded through this complaint.

3. In the written statement filed before the District Forum, the LIC took the stand that the contract of insurance was a contract of good faith ((uberrima fides) and hence, it was the duty of the insured to disclose true information about his medical condition at the time of filling the proposal form. Due to suppression of true and material facts, the contract of insurance was void ab initio. The LIC also stated that the medical check-up was usually conducted by the Medical Officer of the LIC, based on the information supplied by the insured. The Investigator after the receipt of the claim revealed that the assured was suffering from diabetes for the last 22 years and he also remained under treatment at Haryana Naturopathy Hospital, Bhiwani. He remained admitted as indoor patient in the hospital two times, first on 24.12.2002 vide admission No.179/09 and then on 15.7.2003 vide admission No.97/45. Prior to that, he had been admitted at National Kidney Centre at Chandigarh, as per the disclosure in column no.3 of the claim form F3816, as made by the complainant herself. The LIC further stated that another policy no.170206475 for Rs.50,000/- had been purchased by the insured on 28.10.1999 and the payment under that policy had been released to the claimant, since it was not an early death claim case in respect of the said policy. The LIC took the stand that there was no deficiency in service on their part, because the contract of insurance was null and void due to non-disclosure of material information by the insured. The District Forum after considering the averments made by the parties, allowed the consumer complaint vide their order dated 17.11.2005 and directed the LIC to pay the sum assured under the two policies i.e., amounting to Rs.7.75 lakhs alongwith interest @ 9% per annum form the date of repudiation letter i.e. 21.4.2004 till realization. The District Forum also allowed a sum of Rs.20,000/- for mental haras