Insurers must comply with statutory obligations of disclosure; failure to do so prevents repudiation of claims based on misrepresentations in policy applications.

JUDGMENT :

Pankaj Bhatia, J.

1. Heard Sri Prasoon Srivastava, learned Counsel for the petitioner and Sri Dhruv Kumar, learned Counsel appearing on behalf of the respondent no.1. None appears for opposite party no.2.

2. The present application under Article 227 of the Constitution of India has been filed challenging an award dated 21.12.2020 passed by the Permanent Lok Adalat, Lucknow in Case No. 06 of 2017 ( Smt. Padmaja Awasthi vs Bajaj Allianz Life Insurance Company Limited and another ), whereby, the complaint filed by the respondent no.1 was allowed and the petitioner was directed to pay compensation of Rs.50,00,000/- (Rupees Fifty Lac Only) along with interest @ 9% from the date of filing of the case and Rs.5,000/- (Rupees Five Thousand Only) towards litigation cost.

3. Challenging the award impugned, the Counsel for the petitioner argues that the husband of the respondent no.1 became a member in the Master Policy issued by the petitioner-Company in favour of the respondent no.3-Yes Bank for the period 28.09.2012 up to 27.09.2013. Under the policy sum assured was Rs.50/- lac and the premium prescribed was Rs.16,854/- for a term of one year. Unfortunately the beneficiary, namely, Praveen Awasthi died on 26.01.2013 and a claim was filed. The petitioner-Company carried out investigation and repudiated the claim vide letter dated 09.01.2014 on the ground that “medical consultations/ hospitalization on 23^rd December, 2011 and was diagnosed of renal calculi + abscess-calf muscle with past history of anticoagulant medication, history of bleeding, history of blood transfusing and discharged against medical advice. This fact was not mentioned in the enrolment from dated 18.09.2012. These facts known to deceased life assured were not disclosed to us, hence the claim is repudiated.”

4. In terms of the grievance redressal prescribed before the Reviewing Committee, the heirs of the deceased preferred a review, which too was dismissed on 09.05.2014. Challenging the said order, the respondent no.1 approached the Permanent Lok Adalat, Lucknow who has passed the award impugned herein.

5. Before the Permanent Lok Adalat, efforts for reconciliation were taken, however, they failed. Thereafter, the issues were taken up on merit and both the parties were heard. The Permanent Lok Adalat framed two issues of determination. First being “whether the claimant was entitled for any amount of compensation towards the insurance claim”, and second being “the relief to which the claimant was entitled”. The Permanent Lok Adalat decided both the points of determination and awarded compensation in favour for claimant.

6. Challenging the said award, the present application has been filed.It is pleaded that the deceased was admitted in Sahara Hospital, Lucknow 23.12.2011 due to bleeding caused for reaction of ‘warfarin 5mg’ medicine and was discharged on 27.12.2011 and had also given discharge certificate to the investigator. The said fact, according to the petitioner, was not disclosed in the proposal/ enrolment form, which is the basis for repudiation of death claim by the petitioner. The petitioner further places on record a copy of the medical document dated 23.12.2011 showing that the deceased was discharged against medical advise by Avadh Critical/ Coronary Care Unit. Reliance is placed upon the statement of the brother of the deceased, which was given at the time of admission before the Avadh Critical/ Coronary Care,