The duty of the insured to disclose all material facts at the time of submitting an insurance proposal is a central legal principle established in the judgment.

ORDER :

Mr. R. Lakshminarsimha Rao, Member

The complainant being dissatisfied by the order passed by the District Forum granting refund of the premium paid by her deceased husband, has filed the appeal contending that the District Forum has not considered her claim in correct perspective and that it had failed to consider different stand adopted by the respondents in repudiating the claim. It is contended that the District Forum failed to understand the issue involved in the matter and it had ignored the terms and conditions of the insurance policy.

2. The facts leading to the filing of the appeal are that the appellant’s husband obtained life insurance policy bearing No.07366387 on 11.1.2008 by paying premium of Rs.52,164/-.The appellant’s husband was admitted in Latha Super Specialities Hospital on 18.4.2010 and he died on 30.4.2010. The appellant submitted claim and furnished information sought for by the respondent-insurance company. The appellant submitted medical record of her husband, Medical Certificate dated 12.1.2009 of NIMS, Hyderabad and the Death Summary dated 4.5.2010 issued by Latha Super specialties, Vijayawada. The respondent repudiated the claim on the ground of non-disclosure of ill-health of the insured. The appellant protested against repudiation of the claim and the respondent proposed to pay an amount of Rs.52,604/- as a good will gesture.

3. The respondent resisted the claim on the premise that the appellant’s husband obtained insurance policy concealing the fact that he was suffering from hypertension with renal dysfunction and he had undergone renal biopsy and was diagnosed with immunoglobulin. It is contended that the concealment of his ill health by the appellant’s husband deprived the respondent of its right to assess the risk in correct perspective and the insured did not discharge his primary duty of disclosing the true status of his health condition.

4. The appellant filed her affidavit and the documents, Exs.A1 to A11. On behalf of the respondents, the Branch in-charge of the respondent filed his affidavit and the documents, Ex B1 to B6.

5. The District Forum has allowed the complaint on the premise that non-disclosure of material fact relating to the disease the insured suffered from, rendered the insurance policy invalid as also the respondent-insurance company agreed to refund the amount received towards premium from the appellant’s husband.

6. The points for consideration are:

(i) Whether the appellant’s husband suppressed any material fact at the time of submitting the proposal?

(ii) To what relief?

7. POINTS NO.1: The admitted facts of the case are that the appellant’s husband obtained life insurance policy from second respondent-insurance company. The appellant’s husband was admitted in NIMS, Hyderabad on 8.2.2007 and after undergoing renal biopsy he was discharged on 15.2.2007. He was diagnosed with Nephropathy, an end stage of kidney disease and he was advised for haemodialysis.

8. In addition to the medical record, the application submitted by the insured to his employer seeking permission for leave would establish the ill health he suffered from prior to taking the insurance policy. The letter dated 13.10.2008 reads as follows:

I am P. Venkateswarlu with EMP ID 428 suffering from CKD (Chronic Kidney Disease) since one year. The recent day I got affected with high BP problem (180/140). To over this problem I am under the Ayurvedic Doctor treatment. By the suggestion of doctor I should take one month complete rest to overcome this problem. I can submit Doctor’s certificate once I join in the office duty. My leave starting date is 6.10.2008 to 7.11.2008. The attached documents are evidence of current status of disease.

9. Thus, the insured was well aware of his medical status at the time of submitting the proposal and he did not disclose the fact that he was chronically ailing for two years prior to submitting the proposal. The insurance is a contract requiring the person submitting proposal to d