The doctrine of utmost good faith in the conduct of the insured and the obligation to disclose all material facts in a contract of insurance.

ORDER :

MRS. REKHA GUPTA, MEMBER

1. Revision Petition No. 409 of 2013 has been filed by the petitioner/complainant against the order dated 18.10.2012, passed by Haryana State Consumer Disputes Redressal Commission, Panchkula (short, “State Commission”) in First Appeal No. 1476 of 2006.

2. Brief facts of the case as per petitioner/complainant are that Shri Chander Hass Yadav, husband of the petitioner was serving in Air India as ASO and took a LIC policy on 28.2.2001 for Rs. l lakh. Unfortunately, the life insured died on 19.1.2004 of Septic Shock, as per death summary issued by Pushpawati Singhania Research Institute for Liver, Renal and Digestive Diseases, New Delhi. The petitioner submitted a claim with the respondent but the same was repudiated on the ground that before taking of the policy, the life assured was chronic alcoholic as well as a chronic smoker for the last 30 years and had been diagnosed as a patient of severe upper Gl Hemorrhage and Grade IV Desophageal Varices for which he was taking medical treatment from Pushpawati Singhania Research Institute for Liver, Renal and Digestive Diseases, New Delhi. This fact, however, was not disclosed by him in the proposal form while giving his personal statement. Hence, the petitioner challenged the repudiation of her claim by filing a complaint.

3. ‘Respondent Nos. 1 and 2/opposite party Nos. 1 and 2 in their reply before the District Consumer Disputes Redressal Forum, Jhajjar (short, ‘District Forum’) has stated that;

“The deceased life assured was suffering from Septic Shock and as the duration of the policy was less than three years and this being the early claim, it was subjected to death claim investigation as per death claim settlement procedure in vogue. During investigation, it was revealed that life assured was a chronic alcoholic and smoker for the last 30 years as is evident from question No. 11 of Form 3784 furnished by Dr. (Col.) Arun Kumar VSM, MD (Med.) DM (Gastro) AIIMS, New Delhi. The immediate cause of death was decompensated chronic liver disease as per death summary and form 3816 issued by Pushpawati Singhania Research Institution, New Delhi. The cause of death is directly related to his being chronic alcoholic and smoker for the last 30 years at the time of his admission in the Pushpawati Singhania Research Institution, New Delhi. Hence, the deceased life assured did not disclose correctly regarding his health and habits at the time of proposal and had given false answers to question Nos. 11(h) and 11(i) of the proposal form dated 18.3.2001.”

4. District Forum vide order dated 12.5.2006 while allowing the complaint observed that:

“Further the OPs have not placed any cogent or convincing evidence to prove his allegations. Hence, we observe that the OPs have wrongly and illegally repudiated the claim of the complainant.

In view of the above discussion, we have no option except to allow the present complaint. Accordingly, present complaint is hereby allowed by giving direction to pay Rs. 1 lakh including all benefits comes under the policy as insured sum to the complainant within a period of one month. Accordingly, present complaint is hereby disposed of.”

5. Aggrieved by the order of the District Forum, the respondent Nos. 1 and 2 filed an appeal before the State Commission. The State Commission in its impugned order dated 18.10.2012 held as under:

“Undisputedly the life assured had obtained the insurance policy bearing No. 172432591 dated 18.3.2001 for Rs. 1 lakh and died on 19.1.2004. It has also come on the record that life assured was chronic alcoholic as well as chronic smoker for the last 30 years prior to the obtaining of insurance policy. The life assured was suffering from chronic disease prior to the date of purchasing the insurance policy as is evident from the death summary issued by Pushpawati Singhania Research Institution for Liver, Renal and Digestive Disease which reveals that the life assured was having history of alcoholic and a chronic smoker f