The principle of utmost good faith in insurance contracts and the test to determine material facts are crucial in assessing the validity of insurance claims.

ORDER

Mrs. Vineeta Rai, Member - This First Appeal has been filed by Bajaj Allianz General Insurance Co. Ltd. (hereinafter referred to as the Appellant ) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the 'state Commission') in Complaint No. 15/2006 decided in favour of Smt. Valsa Jose, Respondent herein and original complainant before the State Commission.

2. In her complaint before the State Commission, Respondent/Complainant had contended that she had gone to the USA in connection with a delivery of one of her daughters who resides there and had taken an Overseas Travel Insurance Policy which included medical coverage from the Appellant/Insurance Company commencing from 13.11.2003 to 11.3.2004 for a sum of US D 50,000. Respondent reached USA on 14.11.2003 and on 29.1.2004, she developed complaints of shortness of breath, chest heaviness and burning sensation because of which she was taken to the emergency room at Woodwinds Hospital, USA and later shifted to St. Joseph's Hospital, USA where the doctors performed an Angiogram and Angioplasty of her right Coronary Artery. The entire medical expenditure that she incurred was US D 36,538.47. Respondent submitted all relevant documents pertaining to her medical treatment and surgery including through electronic mail to Appellant/Insurance Company who instead of settling the same asked her to file the claim directly with the Claims Department. Respondent, therefore, submitted a claim form along with the documents but despite this, the Appellant/Insurance Company unilaterally rejected her claim. Respondent sent a legal notice for settlement of claim including compensation. However, the Appellant/Insurance Company in response stated that her claim was justifiably rejected on grounds of suppression of material facts pertaining to her past illness. Being aggrieved by this repudiation, Respondent filed a complaint before the State Commission on grounds of deficiency in service and requested that the Appellant/Insurance Company be directed to pay the Respondent, Rs. 17,17,308 towards medical expenditure incurred by her and Rs. 15 lakh as compensation towards mental agony and harassment with interest @ 18% per annum from the date of complaint till payment.

3. Appellant/Insurance Company on being served while admitting that the Respondent had taken an Overseas Travel Insurance Policy from it before travelling to the US stated that the claim was rightly repudiated because the Respondent had suppressed that she was suffering from hypertension and heart ailment prior to the policy period and for which she had undertaken treatment.

4. The State Commission after hearing both parties and on the basis of evidence produced before it allowed the complaint on the grounds that in the absence of an affidavit of Dr. Sanjay Mehrotra, who purportedly treated Respondent for hypertension, there was no credible evidence to prove that the Respondent had been treated for hypertension and cardiac problems. The other medical record regarding the treatment of the Respondent pertained to medical treatment for menopausal related symptoms for which she had consulted one Dr. Shaibya Saldanha who was an Obstetrician and Gynaecologist and this had no nexus with the cardiac medical problems for which Respondent underwent Angiography and related procedures in the USA. The State Commission, therefore, directed the Appellant/Insurance Company to pay jointly and severally Rs. 17,17,308 with interest @ 9% per annum from the date of complaint till realization and Rs. 5,000 as litigation costs.

5. Being aggrieved by this order, the present First Appeal has been filed by the Appellant/Insurance Company.

Counsel for both parties were present. Counsel for Appellant in his oral submissions contended that there was credible evidence on record that the Respondent had a past medical history of hypertension for 4 years and this fact was admitted by her at St. Joseph'