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2025 Supreme(Online)(Mad) 65146
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mrs.Justice S.Srimathy, J
Rani – Appellant
Versus
The Insurance Ombudsman, HDFC Life Insurance Co Ltd. – Respondent
W.P(MD)No.24532 of 2022 | W.M.P.(MD)No. 18596 of 2022
For the Appellants/Petitioners: Mr.R.M.Arun Swaminathan
For the Respondents: Mr.C.Muthu Saravanan
Insurers cannot deny claims based on non-disclosure of health conditions without conducting necessary medical examinations.
Headnote:(A) Insurance Law - Duty of Disclosure - The insurance claim was denied based on alleged non-disclosure of material health conditions by the deceased. The insurer failed to conduct necessary medical examinations and thus acted in bad faith. (Paras 7-14)
(B) Natural Justice - The impugned orders were challenged on grounds of improper procedure as the petitioner was not given notice of the adverse order prior to rejection. (Paras 2.1, 2.2)
Facts of the case:
The petitioner claimed for the insurance amount after her husband's passing, which was denied based on alleged non-disclosure of pre-existing conditions, supported only by a posthumous medical declaration.
Findings of Court:
Insurance company was found to have not acted with good faith by not requiring a medical examination before granting the policy; the denial was deemed unjust.
Issues: The main issues included whether the insured had a duty to disclose pre-existing health conditions and if the insurer should have requested medical verification.
Ratio Decidendi: The insurer must prove that it was materially misled and that a reasonable investigation was not done before rejecting the claim. The contract’s good faith extends to both parties, and lapses in due diligence cannot justify denial of claims.
Result: Writ petition allowed; the insurer is directed to pay the insured amount with interest.
| Table of Content |
|---|
| 1. arguments regarding the acceptance of medical evidence. (Para 4 , 5 , 6) |
| 2. court discusses good faith obligations in insurance. (Para 7 , 8) |
| 3. final ruling and directives for claim disbursement. (Para 9) |
ORDER
The present Writ Petition has been filed for the issuance of a Writ of Certiorarified Mandamus to quash the impugned order passed by the 2nd respondent in Policy No. PP000239 dated 28.03.2021 and consequent order passed by the 1st respondent in Ref.No.CHN-L-019-2223-0137 dated 03.10.2022 and to direct the 2nd respondent to disburse the insured amount with interest fixed by this Court in Policy No. PP000239.
2.1. The brief facts as stated in the affidavit are that the petitioner's husband namely Xavier Selvin has insured with 2nd respondent company in Policy No. PP000239 for Rs.10,47,087/- lakhs on 08.02.2019 and subsequently died on 04.03.2020. The petitioner submitted the claim with the Insurer Office at Madurai on 23.03.2020 and the same was examined by the concerned officer, who raised several questions and the petitioner being wife of deceased aware of the facts, had answered the questions accordingly. The petitioner subsequently came to understand that the Branch Manager of HDFC Life Insurance have asked some queries to one Doctor S.Sivakumar. But the petitioner's husband was never treated or consulted with the said Dr.S.Sivakumar. Without knowing the history of the patient, the Doctor cannot give such a statement, which is against his professional Ethics and also against the Natural Justice. Based on his statement dated 16.03.2020, the authorized authority has rejected the claim. Even the impugned order was not served to the petitioner. But after repeated request of petitioner's brother, the photo copy of the impugned order was given on 26.04.2021.
2.2. The impugned order states that the petitioner had suppressed the material facts and intentionally mislead the company in order to get claim. But the petitioner opposed strongly and condemned the words and also replied the true facts. Further the petitioner was never having any intention to mislead the HDFC Life Insurance Company. Hence the petitioner filed appeal before the Review Committee of the respondent company, but no progress in the appeal. Hence the petitioner submitted an application to the 1st respondent Ombudsmen. The 1st respondent has conducted VC Meeting and passed the subsequent impugned order in Ref.No.CHN-L-019-2223-0137 dated 03.10.2022. Aggrieved over the same the present writ petition is filed.
3.1. The 2nd respondent has filed counter affidavit, wherein the respondent denied the allegations and submitted no averments of the petitioner are admitted by the 2nd respondent. Further stated that the deceased had insured under Policy No. PP00239 for Rs.10,47,087/-, after the death of the insurer on 04.03.2020, the petitioner had submitted a claim to the 2nd respondent on 23.03.2020 along with the necessary insurance documents, medical certificate of the deceased and the death certificate. After thorough perusal of the application and documents it revealed that there are grounds for concern, specifically the doctor's certificate dated 16.03.2020 contained crucial information that the deceased suffered from DM/IHO/Rheumatoid Arthritis for past 5 years. This information clearly indicates that the deceased had been afflicted with Diabetes Mellitus, Ischemic Heart Disease and Rheumatoid Arthritis for five years prior to insurance, which information is pre-existing medical conditions was concealed when acquiring the insurance policy. Hence, the 2nd respondent has rejected the application with a remark that the petitioner shall prefer appeal within 30 days of the order.
3.2. Further stated that if the insurer disclosed his true health condition at the time of taking the policy, the respondent would not have approved the policy without medical examination. Further stated that the petitioner had averred in her affidavit that she had filed revision
