The central legal point established in the judgment is the duty of the proposer in an insurance contract to disclose material facts with utmost good faith, and the consequences of fraudulent suppression of such facts on the validity of the insurance policy.

ORDER

Baldev Singh Sekhon, Member - This appeal has been filed by the appellant/opposite party against the order dated 4.3.2008 passed by the District Consumer Disputes Redressal Forum, Amritsar (hereinafter called as "District Forum") vide which the complaint of the respondent/complainant was allowed.

2. Briefly stated, the facts of the case are that Smt. Kuldip Kaur w/o complainant was approached by Sh. Rajiv Bedi, representative of the opposite party, and on his persuasion she agreed to obtain life insurance policy for a sum of Rs. 1,00,000 from the opposite party in the year 2003. It was pleaded that Mr. Arvinder Singh Bedi, Development Officer of the opposite party, completed the paper work and the wife of the complainant signed the proposal form. The policy was effective from 24.9.2003 for 16 years. Smt. Kuldip Kaur was medically examined by Dr. B.S. Bhatia, MBBS, Baba Bhori Wala, Amritsar on 20.9.2003 and was declared fit for insurance. In the month of February/March, 2006, it was detected that Smt. Kuldip Kaur was suffering from blood sugar and she consulted Dr. P.S. Mokha as an outdoor patient on 3.4.2006. She again contacted Dr. Mokha and was referred to Nayyar Hospital, Amritsar where she remained admitted from 3.4.2006 to 9.4.2006. Her condition was satisfactory at the time of discharge. She was also admitted in Jeevan Jot Hospital on 21.4.2006 for creation of AV Fistula for dialysis purpose and was discharged on the same day. Since the condition of Smt. Kuldip Kaur did not improve, she was again admitted to Nayyar Hospital on 20.5.2006, where she remained up to 23.5.2006 and recovered. However, she suddenly died on 2.8.2006 at home. Thereafter, the complainant filed the death claim with the opposite party but the same was repudiated vide its letter dated 30.12.2006 on flimsy grounds without any basis and reasons. It was alleged by the complainant that the deceased-life assured (hereinafter called as "DLA") was quite healthy and enjoying good health till February/March, 2006, when it was detected for the first time that she was suffering from blood sugar.

3. Upon notice, the opposite party filed written statement pleading that the DLA had wilfully and fraudulently withheld the correct information regarding her health at the time of proposal for insurance on her life as she was not keeping good health and was suffering from Diabetes Mellitus, HTN/HD and ultimately died due to chronic renal failure. All these ailments were not disclosed by her in the proposal form dated 20.9.2003 and she died within two years and ten months of taking of the policy. It was further pleaded that the DLA had wrongly given her income as Rs. 84,000 per year from the tuition work as she was a housewife and had no income at all. The insurance policy was taken just to get claim and embezzle the public fund. It was admitted that the DLA was medically examined by the doctors of the opposite party but denied that she was fit for insurance. In the investigation conducted by the opposite party, it was found from the medical treatment record of Nayyar Hospital, Amritsar that the DLA remained admitted in that hospital from 3.4.2006 to 9.4.2006 and again from 20.5.2006 to 23.5.2006. As per two certificates issued by Nayyar Hospital, the DLA was a known case of diabetes and hypertension and she was suffering from these diseases for the last 5-6 years and she was also previously treated by Dr. P.S. Mokha. The DLA also remained admitted in Jeevan Jot Hospital on 21.4.2006. It was pleaded that the opposite party had rightly repudiated the insurance claim. The dismissal of the complaint was prayed.

4. The parties led their evidence by way of affidavits and documents.

5. The learned District Forum, after going through the pleadings of the parties and evidence on record, allowed the complaint of the complainant and directed the opposite party to pay the amount of i