Non-disclosure of material facts in insurance contracts leads to claim repudiation under the principle of uberrima fides.

1. This complaint under S.12 of the Consumer Protection Act , 1986 (in short, the ˜Act') has been filed by the widow and nominee of her late husband Mr. Rakesh Jain, who had purchased a Met Life Family Income Protector Plus Insurance Policy (in short, ˜the policy') from the Opposite Party for a term plan of 15 years on 7.3.2016 (effective from 19.2.2016) on half yearly premium instalment of Rs. 1,14,632. The life assured expired on 21.5.2016 and the claim under the said policy was disallowed by the Opposite Party. The Complainant has alleged deficiency in service and unfair trade practices and is, therefore, before this Commission with the prayer that the Opposite Party pay the amount of the sum insured of Rs. 90,00,000 along with Rs. 2,00,00,000 for mental agony and Rs. 2,50,000 as legal expenses along with other relief on directions.

2. The Complainant states that the policy was approved after thorough and comprehensive medical examination, including clinical investigations, of the Deceased Life Assured (DLA) by a Doctor empanelled on the panel of the Opposite Party. The fact of the DLA being a diabetes patient, on medication, had been disclosed to the authorized agent of the Opposite Party. The DLA was diagnosed for the first time in April, 2016, with Chronic Kidney Disease, (CKD Grade - V) and he was admitted to Indraprstha Apollo Hospital, Sarita Vihar, Delhi and put on Maintenance Haemeo Dialysis (MHD).

3. On 15.5.2016, the DLA was again admitted to the same hospital for a kidney transplant on 17.5.2016, but unfortunately expired after the said procedure on 21.5.2016. A claim was preferred by the Complainant on 18.6.2016 which was repudiated by the opposite party. It is alleged that the refusal to admit liability is arbitrary and mala fide on the grounds of non - disclosure of material facts, since the DLA had no prior illness relating to kidney which was detected for the first time in April 2016 and the fact of his being a diabetes patient had been disclosed to the agent of the Opposite Party at the time of filling up of the proposal form. The Opposite Parties are, therefore, charged with unfair trade practices and deficiency in providing services. The legal notice dated 10.08.2016 was not replied by the Opposite Party. Hence, this complaint.

4. The Complaint was resisted by the Opposite Party by way of reply. The following preliminary objections were taken that (i) the DLA violated the principle of Uberrima fides (utmost good faith) since it had suppressed material evidence that the DLA suffering from Diabetes mellitus for the past 25 years in the proposal form; (ii) this Commission lacked pecuniary jurisdiction under the Act to entertain the complaint; (iii) it is settled law that when an insurer repudiates its claim on bona fide grounds, it does not constitute ˜deficiency in service'; and (iv) the Complainant is a nominee of a policy obtained by suppression of material information and therefore disentitles the nominee to benefits under the said policy.

5. On merits, it is contended that medical examination by the doctors on the panel of the opposite party was done prior to the policy being approved as per the averments of the DLA in the proposal form and that no evidence had been brought on record that the deceased had apprised the agent of his being a diabetic patient on medication while filling up the proposal form. The DLA's categorical declaration in the negative regarding this illness violated S.45 of the Insurance Act , 1938. Opposite Party