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HARYANA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
R.S. Madan, President and B.M. Bedi, Judicial Member
LIFE INSURANCE CORPORATRION OF INDIA AND ANR. - Appellants
Versus
JASMERI DEVI - Respondent
First Appeal No. 2949 of 2004
Decided on : 22-11-2011
Mr. R.K. Sharma, Advocate, for the Appellant; Mr. Sikander Bakshi, Advocate, for the Respondent
The central legal point established in the judgment is the doctrine of uberrima fides and the obligation of the insured to make full disclosure of material facts in a contract of insurance.
Headnote:
Insurance Fraud - Life Insurance Policy - [Life Insurance, Fraud, Contract of Insurance, Good Faith] - The court referenced the doctrine of uberrima fides, emphasizing the utmost good faith required in a contract of insurance. It highlighted the obligation of the insured to make full disclosure of material facts and the consequences of concealing relevant information. The court also cited relevant case law to support the insurer's right to repudiate the insurance contract due to the insured's suppression of material facts.
Fact of the Case:
The case involved a dispute over insurable benefits in a Life Insurance Policy obtained by the deceased. The insurer repudiated the claim based on the insured's concealment of his illness at the time of obtaining the policy.
Finding of the Court:
The court found that the deceased had obtained the insurance policy by playing fraud with the Insurance Company by giving false statements and concealing his illness. The court held that the insurer was justified in repudiating the claim and dismissed the complaint.
Issues: The key issue was whether the insured had made full disclosure of material facts at the time of obtaining the insurance policy, and whether the insurer was justified in repudiating the claim based on the insured's concealment of his illness.
Ratio Decidendi: The court emphasized the doctrine of uberrima fides and the obligation of the insured to make full disclosure of material facts in a contract of insurance. It cited relevant case law to support the insurer's right to repudiate the insurance contract due to the insured's suppression of material facts.
Final Decision: The appeal was accepted, the impugned order was set aside, and the complaint was dismissed. The statutory amount deposited at the time of filing the appeal was ordered to be refunded to the appellants.
ORDER
R.S. Madan, President - This appeal has been preferred against the order dated 3.9.2004 passed by District Consumer Forum, Yamuna Nagar at Jagadhri in complaint No. 690/2003 which relates to the insurable benefits in respect of Life Insurance Policy obtained by Gian Chand -husband of the respondent (complainant).
2. Undisputed facts of the present case are that Gian Chand (hereinafter referred to as the Life Assured) had got his life insured with the appellant-opposite parties vide Insurance Policy dated 3.9.2002 for Rs. 50,000. The Life Assured died on 31.3.2003 due to illness. Complainant submitted claim with the opposite parties with respect to the above said policy. Being an early claim as the life assured died within one year from the date of commencement of the policy, the opposite parties investigated the matter upon which it revealed that the life assured was suffering from cancer for the last one and half years and he was taking treatment from Waryam Singh Hospital, Yamuna Nagar where he remained admitted w.e.f. 4.9.2002 to 8.9.2002 prior to the obtaining of the Insurance Policy. The life assured was also treated from P.G.I., Chandigarh, but in the proposal form, the life assured concealed this fact by making false personal statement and gave wrong answers to Question No. 11.
3. Challenging the repudiation of his claim, the complainant invoked the jurisdiction of the District Forum by filing complaint and the same was contested by the opposite parties on the above stated ground.
4. On appraisal of the pleadings of the parties and evidence brought on record, the District Consumer Forum while accepting the complaint observed that the treating doctor was not examined by the opposite parties and for that reason the documents produced by the opposite parties could not be the basis to be believed the version of the opposite parties.
5. Aggrieved against the order of the District Forum, the opposite parties have come up in appeal.
6. We have heard learned Counsel for the parties and perused the case file.
7. On behalf of the appellant-opposite parties the impugned order has been assailed on the ground that the contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. Onus to prove that deceased had made a false statement and suppressed the material facts at the time of submitting the proposal form lies upon the opposite parties.
8. Learned Counsel for the appellants during the course of arguments has referred to the certificate issued by Waryam Singh, Maternity and General Hospital, Yamuna Nagar on Claim Form Ex.R-2 wherein it has been mentioned that the life assured aged about 45 years was admitted in the hospital on 4.9.2002 and was discharged on 8.9.2002, he was suffering from Metastatic CS node but in the proposal form dated 21.4.2002 he had given the answers to the questions detailed in Question No. 11 in negative and stated that he was having good health and was never treated for any kind of diseases nor remained admitted in any hospital prior to the said date.
9. Thus, after scrutiny of the aforesaid documents it is manifest that the life assured (now deceased) had concealed the true facts with respect to his state of health while submitting the proposal form. The legal position in this regard may be noticed from para 19 of the authoritative pronouncement cited as Crown Consultants Pvt. Ltd. v. Oriental Insurance Company Ltd., (2011) 3 CPJ 439 (NC), as under:
"19. A contract of insurance is based on the doctrine of uberrima fides, i.e., "utmost good faith", in the conduct of the insured. This doctrine was enunciated as far back as in 1766 by Lord
