Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Subhash Chandra, Presiding Member and
AVM J. Rajendra, AVSM VSM (Retd.), Member
Omprakash Khandelwal – Petitioner
versus
Oriental Insurance Company Limited – Respondent
Revision Petition No.770 of 2017
(Against the Order dated 24/08/2016 in Appeal No. 224/2016 of the State Commission Chhattisgarh)
Decided on 1.1.2025

Counsel for the Parties:
For the Petitioner:Mohd. Anis Ur Rehman and Mr. R.K. Bhawnani, Advocates
For the Respondent:Mr. Ajay Singh, Advocate

IMPORTANT POINTS
(1) Insurance – A contract of insurance is one of utmost good faith.
(2) Proposer – Proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed.

Headnote:
Consumer Protection Act, 1986 – Section 21(b) [Consumer Protection Act, 2019 – Section 58(1)(b)] – Services – Insurance – Repudiation of Claim – A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk – In the present case, it is the contention of the Petitioner that he was covered under the mediclaim insurance policy No.192100/48/ 2014/2430 valid from 30.03.2014 to 29.03.2015 for a sum insured of Rs.Three Lakhs. However, his claim amount, which was incurred during hospitalization, was repudiated during the subsistence of the policy on frivolous ground. It is also an admitted position that the insured was diagnosed various ailments before taking the insurance policy in question. While the Complainant asserted that the insured did not conceal about the previous illness, however, the self declaration form filled by the insured reveals that he had mentioned “HBP” with respect to High Blood Pressure and “No’ with respect to the Diabetes or any urinary diseases. Also, as per the discharge summary of the Jupiter Hospital dated 16.04.2014, it was mentioned that the insured had the history of hypertension since 10 years and Diabetes Mellitus since 20 years – On facts, petition dismissed. [Paras 10 to 17].
Result: Petition dismissed.

ORDER

AVM J. Rajendra, AVSM, VSM (Retd.), Member—This Revision Petition is filed under Section 21(b) of the Consumer Protection Act, 1986 (the “Act”) against the Chhattisgarh State Consumer Disputes Redressal Commission, Raipur, (‘the State Commission’) order dated 24.08.2016 in FA No. 224/2016 allowing the Appeal filed by the Respondent/OP against order dated 07.04.2016 passed by the District Consumer Disputes Redressal Forum, Durg (‘District Forum’) which allowed the complaint.

2. As per the office report, there is 119 days delay in filing this Revision Petition. For the reasons stated in I.A. No.19028 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 obtained an individual medi-claim policy for himself and his wife starting in 2011-12, which has been renewed annually and was active for the period 2014-15 with a sum insured of Rs.3,00,000. On 12.04.2014, the complainant was admitted to Jupiter Hospital due to heart-related ailments and underwent coronary angioplasty and other treatments, incurring medical expenses of Rs.3,49,133. Before the treatment, the complainant requested a cashless facility from the Opposite Party (OP) insurance company, which was denied. As a result, he paid for medical expenses out of his pocket. Later, he sought reimbursement of expenses, but the OP refused to provide the claim form, stating that the claim had already been rejected. The insurer justified the repudiation on the grounds that the complainant had a pre-existing condition of hypertension, which was concealed at the time of obtaining the policy. Despite sending a legal notice on 02.06.2014, he did not receive the claim form. He alleged that OPs actions in denial of cashless facility, refusal to provide the claim form and claim repudiation constituted deficiency in service and unfair trade practices. Being aggrieved, he filed a complaint before District Forum seeking claim of Rs.3,00,000 with interest, Rs.50,000 as compensation for mental agony and litigation costs and other reliefs.

5. In its written statement before the District Forum, the OP asserted that the complainant obtained the mediclaim policy in 2011 but failed to disclose critical information about his medical history. The complainant had been suffering from hypertension for 10 years and diabetes for 20 years at the time of purchasing the policy, but these pre-existing conditions were not disclosed. The OP averred that this amounted to a concealment of material facts, thereby breaching the terms and conditions of the policy. As a result, the OP is not liable to accept or approve the complainant’s insurance claim.

6. The learned District Forum vide Order dated 07.04.2016 allowed the complaint and granted the following relief:—

“(a) The non-applicant insurance company to pay the claim amount of Rs.3,00,000/- to the complainant.

(b) The non-applicant shall be liable to make the payment of interest at the rate 12% per annum, in case the payment of the above amount is not made within the above period to the complainant from the date of the order.

(d) The non-applicant shall make the payment of Rs.10,000/- as the litigation expenses to the complainant.” (Extracted from translated copy)

7. Being aggrieved by the Order of the learned District Forum, the OP filed First Appeal No. FA/16/224 and the State Commission vide order dated 24.08.2016 allowed the Appeal and dismissed the complaint filed by the Complainant with the following observations:

“5. The final arguments were put forward by Sushri B.S. Kanti, counsel for the appellant and by Shri Anurag Thaakar, counsel for the respondent. The perusal of the original records was made by us.

6. The main argument was put forward by the counsel for the non - applicant / appella