The burden of proof lies with the Insurance company to establish non-disclosure of material information, and suspicion alone is not sufficient to repudiate a claim.

VINOD S. BHARDWAJ, J.

CM-17492-CWP-2023

The present application has been filed under Section 151 of the Code of Civil Procedure for placing on record the Circular dated 22.07.2020 issued by Insurance Regulatory and Development Authority of India as Annexure P-5.

Application is allowed as prayed for and Circular dated 22.07.2020 issued by Insurance Regulatory and Development Authority of India is taken on record as Annexure P-5.

1. Challenge in the present petition is to the order dated 19.12.2022 (Annexure P-1) passed by respondent-Permanent Lok Adalat (Public Utility Services), Gurugram directing the petitioner Insurance company to pay a sum of Rs. 2,33,572/- alongwith interest @ 6% per annum.

2. Briefly summarized, the facts of the present case are that the respondent No.1-Insured Anant Ram had taken a medi-claim Insurance policy bearing No. P/161116/01/2015/003442 for the period 28.11.2014 to 27.11.2015 from the petitioner-Insurance company. It is averred that on 22.04.2015, father of respondent No.1 was admitted in Alchemist Hospital, Gurugram after suffering from acute Cad/post PTCA and was discharged on 23.04.2015. The respondent incurred an expenditure of Rs. 1,50,000/- approx. for the above treatment. His father had to be re-admitted in Metro Heart Institute on 17.05.2015 and was discharged on 21.05.2015. An amount of Rs. 2,50,000/- was spent on the above treatment. He was again readmitted on 22.05.2015 in Samwit Health Care, Sohna Road, Gurugram. The father of the respondent eventually passed away on 22.05.2015 at 12:10 p.m. A further sum of Rs. 50,000/- was spent this time on the treatment. Hence, total expenditure incurred was of Rs. 4,50,000/- towards treatment, transportation etc. A cashless treatment claim was lodged by the respondent No.1. with the petitioner-Insurance company which was however declined on the ground of non-disclosure of material facts. Consequently, an application under Section 22 (C) of the Legal Services Authorities Act, 1987 was filed by the respondent No.1 before the Permanent Lok Adalat (Public Utility Services), Gurugram.

3. The petitioner-Insurance company entered its appearance and raised various objections to the claim application on the ground of maintainability, cause of action, concealment of true and material facts and also replied that the applicant had past medical history of heart disease since 2008 and undergone PTCA. The admission record shows that the applicant was a known case of coronary artery disease and that the said aspect had not been disclosed at the time of inception of the policy. The conduct of the respondent was thus in breach of the terms and conditions of the policy and that the denial of the cashless authorization on the ground of non-disclosure of the past arterial disease was valid. The Insurance contract being a contract of utmost good faith, suppression of any such information entitles the petitioner –Insurance company to repudiate the said claim. It is further averred that the medi claim policy being a senior citizen red carpet policy, special privileges were offered to the senior citizens to obtain the policy without a pre-medical screening and only on the basis of the declarations made in the proposal form. Non-disclosure of the past medical history in the proposal and at the time of inception of the insurance policy about Budhi Ram-father of respondent No.1, the Insurance company was within its rights to repudiate the said claim.

4. After the efforts of amicable resolution of the dispute failed to resolve the issue, adjudication under Section 22 (C) (8) of the Legal Services Authorities Act, 1987 was initiated.

5. Upon consideration of the contentions raised on behalf of the respective parties, the Permanent Lok Adalat (Public Utility Services), Gurugram allowed the application and directed the petitioner-Insurance company to pay the claim amount of Rs. 2,33,570/- alongwith interest @ 6% per annum from the date of filing of the application till its realization