IMPORTANT POINT
If insurance cover was obtained by concealment of a material fact with respect to an ailment from which the insured was suffering at the time the proposal was submitted the repudiation of the claim on account of the aforesaid material concealment was justified.

ORDER

V.K. Jain, Presiding Member

Late Shri Banshi Lal father of the petitioner obtained an insurance policy from the respondent - SBI Life Insurance Co. Ltd. in respect of a loan which he had taken from State Bank of India. In the proposal submitted by him, he was interalia required to disclose whether he was suffering from Diabetes. The said question was a part of the good health declaration contained in the proposal form. Mr. Banshi Lal signed the declaration to the effect that he was not suffering from the ailments specified therein, including Diabetes. The declaration was also signed by the complainant/petitioner Mr. Dinesh Soni who signed the said document in English. Shri Banshi Lal having died on 14.7.2011 a few months after obtaining the insurance policy, a claim in terms of the insurance policy was lodged by the complainant/petitioner with the respondent SBI Life Insurance Co. Ltd. The claim was rejected vide letter dated 29.12.2011 which to the extent it is relevant, reads as under:-

“Late Banshi Lal Soni, while applying for enrollment under the SB] Dhanraksha Plus LPPT Personal Loan scheme had signed ‘Declaration of Good Health’, which mentions that he was of sound health and was not suffering or had never suffered from any Critical illness or any condition requiring medical treatment for Illness, as on date of enrollment.

As per the records available with us, Late Banshi Lal Soni was suffering from and under treatment for Diabetes Mellitus Type II prior to the date of enrollment of policy.

As the deceased Life Assured had given a false Good Health Declaration and had not disclosed material fact at the time of entry into the scheme, the claim has been repudiated.”

2. Being aggrieved from the rejection of the claim, the complainant approached the concerned District Forum by way of a consumer complaint. The complaint was resisted by the respondent primarily on the ground on which the claim had been repudiated.

3. The District Forum having dismissed the complaint, the petitioner approached the concerned State Commission by way of an appeal. The said appeal also having been dismissed vide impugned order dated 9.2.2018, the petitioner is before this Commission.

4. It is submitted by the learned counsel for the petitioner that late Shri Banshi Lal was an illiterate person and in any case he had disclosed to the doctor who had examined him that he was suffering from Diabetes. Thus, it is not in dispute that the deceased insured was suffering from Diabetes at the time the proposal was submitted by him. The learned counsel for the petitioner also submits that the proposal was filled up by the agent and not by Mr. Banshi Lal himself. Neither the agent who allegedly filled up the proposal nor the doctor who examined the insured was impleaded as a party to the consumer complaint. Consequently, it was not possible to verify as to whether the proposal was filled up by the agent or by the insured himself and in case it was filled up by the agent whether he did so strictly in terms of the instructions received from the insured or not. The insured having signed the proposal form he was bound by the answers and the declaration contained therein

5. As noted earlier, the proposal was also witnessed by none other than the petitioner/complainant himself who does not claim to be an illiterate person. Had the agent filled up the declaration contrary to the instructions given to him by the insured, the petitioner, he being the son of the insured would certainly have objected to it and would have insisted upon a correct answer being incorporated in the proposal before it was signed by his father. Therefore, I am satisfied that the proposal was filled up as per the instructions of the insured himself.

6. In LIC of India Vs. Manish Gupta – Civil Apeal No.3944 of 2019, decided on 15.04.2019, the proposal form required a disclosure as to whether the proposer had suffered from Cardiovascular disease, he responded in negative to the said ques