Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
AVM J. Rajendra, AVSM VSM (Retd.),
Presiding Member
Subhash Kumar – Petitioner
versus
Branch Manager, Bajaj Allianze
Life Insurance Co. Ltd. and Anr. – Respondents
Revision Petition No.2049 of 2017
(Against the Order dated 07/03/2017 in Appeal No. 871/2015 of the State Commission Haryana)
Decided on 1.5.2024

Advocates:
Counsel for the Parties:
For the Petitioner:Ms. Richa Sharma, Advocate
For the Respondents:Ms. Shweta Singh Parihar, Advocate

IMPORTANT POINTS
(1) Insured – The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries.
(2) Non-disclosure – The rule of non-disclosure of material facts vitiating a policy still holds the field.
(3) Contract of Insurance – It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith uberrimae fidei, applicable to both the parties.
(4) “Material facts” – A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.”

Headnote:
Consumer Protection Act, 1986 – Section 21(b) [Consumer Protection Act, 2019 – Section 58(1)(b)] – Services – Insurance – Repudiation of Claim – Death Claim – It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith uberrimae fidei, applicable to both the parties. The rule of non-disclosure of material facts vitiating a policy still holds the field. The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge. The insurer may not even have the means to find out facts which would materially affect the risk. The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries. A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.” – It is an admitted position that the insured was suffering certain ailments and had not disclosed these material facts at the time of taking the insurance policies. The DLI did not disclose the medical conditions while filling the proposal and obtained the policies. The Respondents/OPs asserted that the contract for life insurance is based on utmost good faith and the insured was bound to clearly bring out all prescribed details, including his medical condition – In the present case, it is the contention of the Petitioner that the deceased insured was covered under the life insurance policies from 24.09.2012 for maturity sum assured Rs.2.5 Lakh each – Therefore, the insured died on 01.03.2013. It is also an admitted position that the insured was diagnosed various ailments and had undergone treatment for same before taking the insurance policy in question. While the Complainant asserted that the deceased insured did not conceal about the previous illness, however, the proposal form filled by the deceased insured reveals that he had not mentioned any previous illness – On facts, Petition dismissed. [Paras 10 to 15].
Result: Petition dismissed.

ORDER

The present Revision Petition has been filed by the Petitioner under Section 21(b) of the Consumer Protection Act, 1986 (the “Act”) against impugned order dated 07.03.2017, passed by the learned Haryana State Consumer Disputes Redressal Commission, Panchkula, (‘the State Commission’) in First Appeal No. 871/2015 wherein the State Commission allowed the Appeal filed by the Respondents/OPs against the order dated 05.08.2015 passed by the learned District Consumer Disputes Redressal Forum, Sonipat, (‘the District Forum’) wherein the District Forum had allowed the complaint filed by the Petitioner/Complainant.

2. As per the office report, there is 10 days delay in filing this Revision Petition. For the reasons stated in I.A. No.9635 of 2017, the delay is condoned.

3. For convenience, the parties are referred to as placed in the original Complaint filed before the District Forum.

4. Brief facts of the case, as per the Complainant, are that he filed the death claim of the two policies of his wife (deceased life insured-DLI), after her death on 01.03.2013 for maturity sum assured Rs.2.5 Lakh each. However, the OPs repudiated the claim on the grounds non-disclosure of treatments taken. Aggrieved, he filed a complaint seeking directions to OPs to pay the claim with interest @ 18% per annum from the date of claim till the actual realization along with Rs.2 Lakh compensation on account of mental harassment, pain and agony together with Rs.50,000/- as litigation expenses.

5. In reply, the Respondents/OPs admitted the issue of policies and receipt of the claim and contended that, while taking the policy, the deceased life insured (DLI) had hidden material information about her disease and treatment and deliberately did not disclose the facts of her ailment. This amounted to suppression of material facts and giving misstatements with ulterior intention to obtain the insurance policies. The OPs came to know during investigation that the DLI was a patient of Acute Gastroenteritis with Septicemia with Shock with Cerebrovascular Accident CVA (Old) as per Discharge Summary Sheet of Jaipur Golden Hospital and had taken treatment, prior to date of filing up the proposal form. Hence, the OP rightly repudiated the claim for non-disclosure of the material facts in the proposal form of the policy. The decision to repudiate the claim was taken in good faith and based on an inquiry. This being a considered repudiation, no deficiency is involved.

6. The learned District Forum vide Order dated 05.08.2015 allowed the complaint and granted the following relief:—

“In our view, the disease for which the deceased has taken the treatment, cannot be said to be the chronic disease and these are very common, normal and routine manner disease. It is very strange that the respondents no.1 and 2 have repudiated the claim of the complainant on the routine manner disease, whereas he was entitled for the claim amount of the policies in question. Accordingly, we allow the present complaint with the directions to the make the payment of Rs. 2,50,000/- each qua policy no. 282217167 and 282219325 and the said amount is directed to be paid to the complainant along with interest at the rate of 09% per annum from the date of filing of the present complaint till realization and further to compensate the complainant to the tune of Rs. 2000/- (Rs. Two thousands) for rendering deficient services, for harassment and further to pay Rs. 2000/- (Rs. Two thousands) under the head of litigation expenses.”

7. Being aggrieved by the Order of the learned District Forum, the OPs filed First Appeal No.871 of 2015 and the State Commission vide order dated 07.03.2017 allowed the Appeal and dismissed the complaint filed by the Complainant with the following observations:—

“4. The question for consideration before this Commission as to whether the Insurance Company was justified in repudiating complainants’ claim or not?

5. The insured purchased two insurance policies on September 24t

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