The duty of utmost good faith in insurance contracts and the justification for repudiation of the claim based on the insured's suppression of material facts about his health condition in the proposal form.

ORDER

Veena Birbal, President.—This is an appeal u/s 15 of the Consumer Protection Act (in short, 'the Act' ) wherein challenge is made to order dated 28.10.2009 passed in Complaint Case No.1276/07 by the Consumer Disputes Redressal Forum-New Delhi ( in short,"the District Forum")

2. The facts leading to the filing of present appeal are as under:

Respondent herein i.e. Complainant before the District Forum had filed a complaint u/s. 12 of the Act stating therein that her husband Sh. Udai Singh was working as a postman with the appellant/OP. On 30.03.2006 respondent's husband had applied for a Postal Life Insurance for a sum of Rs.3 lacs till the maturity age of 60 years at a premium of Rs.5385/- per month. On 02.05.2006 proposal was accepted and appellant/OP had issued a letter of acceptance informing that risk of his life had been insured w.e.f. 30.03.2006. On 22.5.2006, Postal Life Insurance policy was issued in the name of her husband with the name of respondent/complainant as a nominee. On 02.11.2006 the husband of respondent/complainant had expired due to sudden ailment. The respondent/complainant being nominee had preferred a claim with appellant/OP. However, the claim was repudiated vide letter dated 14.09.2007 wherein it was alleged that her husband i.e. insured had concealed material facts about his ailment in the proposal form at the time of taking policy, as such the policy was void. The respondent/complainant gave a legal notice for review of the repudiation letter and had informed that her husband had not concealed any material fact as was alleged. However, no response was received. Ultimately, she had filed the aforesaid consumer complaint wherein a prayer was made for award of Rs. 3 lacs with interest @18% till realisation along with compensation and cost of litigation.

3. The claim was opposed by the appellant/OP by filing written statement wherein it was stated that husband of respondent/complainant had procured Postal Life Insurance No. DL/80531-P for Rs. 3 lacs on submission of proposal form dated 30.03.2006. The proposal was processed by appellant/OP on the information furnished by the insured. After the death of the insured on 2.11.2006, his nominee i.e. respondent/complainant preferred the claim. On processing the claim which was premature one (below 3 years) it was ascertained through medical certificates submitted by the insured prior to obtaining the said insurance policy that he was a patient of NHL(Non Hodgkin's Lymphoma), a cancer of the lymphoid tissue. It was alleged that insured had concealed the said fact at the time of taking the policy which had rendered the policy void under the terms and conditions of the policy. It was alleged that the respondent/complainant was not entitled for any claim amount from the appellant/OP.

4. Both the parties had filed evidence in the form of affidavits before the Ld. District Forum. After hearing the counsels of the parties, the Ld. District Forum had held that documents furnished by the appellant/OP did not show any material that insured was aware of the disease or that he did not intentionally disclose the same while obtaining the policy. It was held that from leave record relied upon by the appellant/OP it could not be said that insured was suffering from cancer. Accordingly, the District Forum directed the appellant/OP to pay Rs. 3 lacs to the respondent/complainant being nominee of the insured, Rs.40,000/- has been awarded as compensation and Rs.10,000/- towards the cost of litigation.

5. Aggrieved with the aforesaid order present appeal is filed.

6. Ld. Counsel for appellant has contended that the finding of the District Forum that the insured was not aware about alleged disease is contrary to the material on record. It is contended that insured had deliberately given wrong declaration in the proposal form. It is submitted that while working with the appellant/OP the insured had availed leave number of times. Along with leave applications the insured had s