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2011 Supreme(P&H) 2196
STATE CONSUMER DISPUTES REDRESSAL COMMISSION PUNJAB
Inderjit Kaushik and Piare Lal Garg, JJ.
Baljit Kaur - Appellant
Versus
Life Insurance Corporation of India, Division Office Jeevan Parkash, Model Town Road through its Sr. Divisional Manager - Respondent
First Appeal No. 707 of 2007.
Decided On : 22 December, 2011
For the Appellant :Sh. Arun Bakshi, Advocate.
For the Respondent:Sh. Rajneesh Malhotra, Advocate.
Non-disclosure of certain health-related information did not constitute material suppression of facts, rendering the repudiation of the claim illegal.
Headnote:
Insurance - Repudiation of claim - Insurance Act, 1938 - Section 45 - Material suppression of facts - Fraudulent suppression - Knowledge of falsity - [INSURANCE] - [REPUDIATION OF CLAIM] - [Insurance Act, 1938 - Section 45] - The court discussed the essential conditions for the application of Section 45 of the Insurance Act, 1938, emphasizing material suppression of facts, fraudulent suppression, and the policy-holder's knowledge of falsity. It held that non-disclosure of fever and leave taken by the insured on medical grounds did not amount to material suppression of facts, and the repudiation of the claim was deemed illegal. The court directed the respondent to pay the policy amount with all consequential benefits to the appellant.
Fact of the Case:
The appellant's husband purchased a life insurance policy, which was later repudiated by the respondent on the grounds of material suppression of facts regarding the insured's health at the time of effecting the assurance.
Finding of the Court:
The court found that the repudiation of the claim by the respondent was illegal as the non-disclosure of fever and leave taken by the insured on medical grounds did not amount to material suppression of facts.
Issues: The issues revolved around the repudiation of the insurance claim based on the alleged material suppression of facts by the insured regarding his health at the time of effecting the assurance.
Ratio Decidendi: The court emphasized the essential conditions for the application of Section 45 of the Insurance Act, 1938, and held that non-disclosure of certain health-related information did not constitute material suppression of facts, rendering the repudiation of the claim illegal.
Final Decision: The court set aside the order of the District Forum and directed the respondent to pay the policy amount with all consequential benefits to the appellant.
Piare Lal Garg, J. - This is an appeal filed by the appellant/complainant-Smt. Baljit Kaur (hereinafter called the appellant) against the order dated 2.4.2007 of the District Consumer Disputes Redressal Forum, Jalandhar(hereinafter called the District Forum) by which the complaint of the appellant was dismissed by the District Forum.
2. Brief facts of the case are that the respondents husband had purchased life insurance policy No. 131706554 on 12.6.2003 for a sum of Rs. 6,00,000/-, which commenced from 15.6.2003. The said policy was issued for the term of 20 years with profits plus accident benefits. The respondent was nominee in the said policy and the said policy was issued to the appellants husband after conducting tests by authorized doctors/medical examiner. Appellants husband unfortunately died on 16.8.2004 due to Cellulites Right leg/septicemia i.e. swollen right leg. Thereafter, the appellant had filed the claim with the respondent for the payment of the insurance amount after completing all the formalities. But the respondent had repudiated her claim vide letter dated 26.3.2005 on the ground that the life assured had concealed the material information in the proposal form with regard to his health. It was pleaded that the life assured was not required to nor was expected to remember the minor ailments, such, as head-ache for which a person avails leave from his employer. The said allegations were illegal and without any basis because the life assured was hale and hearty at the time of taking the insurance policy. Complaint was filed on the ground that her claim was wrongly/illegally repudiated and prayed that the respondent may be directed to pay the policy amount of Rs. 6,00,000/- alongwith all the benefits accrued under the policy with interest @ 18% per annum from the date of death till payment, compensation of Rs. 1,00,000/- on account of mental tension and harassment as well as Rs. 10,000/- as litigation expenses was also prayed for.
3. Upon notice, the respondent replied by taking preliminary objections that the complaint was not in the proper form, hence the same was liable to be dismissed, appellant was estopped by her own act and conduct to file the present complaint, appellant has not come to the District Forum with clean hands, the complaint involves complicated questions of law and facts. On merits, it was admitted that the husband of the appellant had purchased insurance policy for a sum of Rs. 6,00,000/- from the respondent, which was issued on the basis of proposal form, which was duly filled and signed by the life assured but the deceased did not disclose true facts in the proposal form regarding his ailment at the time of execution of the proposal form. If he had disclosed the same then the respondent might have called for special tests, as his illness may effect the under writing decision in assessing the risk on his life. The medical examination was conducted on the basis of information supplied by the life assured and the same was only of questionnaire type and no clinical tests or examination was conducted. It was admitted that the life assured had died on 16.8.2004 due to high fever, which was proved from Form No. 3783. The appellant had filed the claim, which was repudiated on 26.3.2005 after due deliberation and application of mind as the deceased had concealed the fact of his ill health and leave taken on sick/medical ground. The life assured remained under treatment for P.U.O. for one month as per Form No. 3816 i.e. "Certificate of Hospital Treatment Northern Railway, Jalandhar Cantt", which was not a minor ail and he had intentionally suppressed this information. It was denied that the claim was wrongly, illegally and arbitrarily repudiated. It was pleaded that the appellant is not entitled for any claim amount as her claim was rightly repudiated after due application of mind. All other allegations were denied and dismissal of the complaint was prayed.
4. Learned District Forum afte
