CHHATTISGARH STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANDRI, RAIPUR
Gautam Chourdiya, President, Smt. Ruchi Goel, Member, Gopal Chandra Shil, Member and Pramod Kumar Varma, Member
In the Matter of: Pramerica Life
Insurance Limited (Formerly Known
as DHFL Pramerica Life Insurance
Company Ltd.) – Appellant
versus
Vijay Lakshmi Sharma and Anr. – Respondents
Decided on 6.12.2022
Appeal No.FA/22/13

IMPORTANT POINTS
(1) Six months - Section 45 of the Insurance Act 1938 also is of no help the complainant as in the present case the insured died within six months of taking the insurance policy.
(2) Proposal form - The proposal form also has declaration of the deceased insured, duly signed, to the effect that in case any of the statement made in the proposal form, is found false or incorrect or untrue, then the contract of insurance shall be invalidated.
(3) Contract of Insurance - the contract of insurance is based on utmost confidence and good faith between the parties, in respect of the facts stated in the proposal form, as well as in the insurance policy and the parties mutually believe on the version of each other in respect of those facts.
(4) Material facts - If the agreement of insurance is made on the basis of the facts, which were incorrect, then definitely the Insurance Company was having right to avoid it’s liability, on the ground of fraud and suppression of material facts at the time of making proposal for the contract of insurance.

Headnote:

Consumer Protection Act, 2019 – S.41 – Appeal Against order of District Commission - Services – medical Insurance – death of patient - Repudiation of Claim – suppression of Material facts – proposal form - non disclosure of existing illness – Repudiation justified - The Discharge Summary dated 21/11/2017, Annexure OP1/D clearly shows that the deceased Kamlesh Sharma suffered congestive cardiac failure for which he was treated, admitted in ICU and further procedures were adopted between 18/11/2017 to 21/11/2017. This fact was suppressed by the deceased. In the application form filled for obtaining life insurance cover, all the questions regarding existing diseases as well as previous treatments and hospitalization have been replied in ‘No’ by the deceased, which amounts suppression of material facts regarding his health condition and treatment. Whereas, just below the Medical Questionnaire on the same page, he declared that he has given all the information to the best of his knowledge and nothing has been concealed. He also declared that the said form will constitute as part of application form for insurance policy and any event of failure to disclose any material fact will invalidate the insurance itself. He has also declared that he understood in case of any fraud or misrepresentation by him the policy will be cancelled with payment of its surrender value, if any. Further he has also declared that the content of the form and document has been fully explained to him and he has fully understood the significance of the proposed contract - Section 45 of the Insurance Act 1938 also is of no help the complainant as in the present case the insured died within six months of taking the insurance policy - Undoubtedly, the contract of insurance is based on utmost confidence and good faith between the parties, in respect of the facts stated in the proposal form, as well as in the insurance policy and the parties mutually believe on the version of each other in respect of those facts. If the agreement of insurance is made on the basis of the facts, which were incorrect, then definitely the Insurance Company was having right to avoid it’s liability, on the ground of fraud and suppression of material facts at the time of making proposal for the contract of insurance - The proposal form also has declaration of the deceased insured, duly signed, to the effect that in case any of the statement made in the proposal form, is found false or incorrect or untrue, then the contract of insurance shall be invalidated. He also declared that the content of the form and document has been fully explained to him and he had fully understood the significance of the proposed contract. These declarations authorize the insurance company to avoid its liability under the insurance policy as it absolutely became null and void on the basis of deliberate suppression of material facts by the deceased insured for obtaining the insurance cover – Therefore, appeal succeeds and is allowed. [Paras 14 to 19]

Result: Appeal allowed.