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2025 Supreme(Online)(NCDRC) 2516
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
HON'BLE MR. JUSTICE A. P. SAHI, PRESIDENT, HON'BLE MR. BINOY KUMAR, MEMBER
MAX LIFE INSURANCE COMPANY LTD. – Appellant
Versus
AMARAMA & ANR. – Respondent
FIRST APPEAL NO. NC/FA/594/2022 | Complaint 402/2018
For the Appellants/Petitioners: Ms Suman Bagga
For the Respondents: Ms Girija Patil, Mr Bharat Sood
The insured's claim was upheld as the insurance company failed to prove material non-disclosure of pre-existing conditions, supported by a medical examination indicating good health at the time of policy issuance.
Headnote:(A) Insurance Act, 1938 - Section 45 - Contract of insurance - Allegation of material non-disclosure of pre-existing ailments - The insurance company initially repudiated the claim due to policy lapse but later attributed it to non-disclosure of health issues; the State Commission found no evidence of suppression, leading to the appeal. (Paras 1, 7, 12-14, 21-30)
(B) Burden of proof - The insurance company failed to establish that the insured had suppressed material facts regarding pre-existing health conditions, as the medical examination prior to policy issuance indicated the insured was healthy. (Paras 26-30)
(C) Doctrine of Uberrima Fidei - The principles of utmost good faith in insurance contracts were not violated as the insured was found healthy at the time of the proposal. (Paras 23-25)
Facts of the case:
The complainant's husband had an insurance policy that was repudiated by the insurer on the grounds of non-disclosure of pre-existing conditions; the State Commission ruled in favor of the complainant, finding no evidence of suppression.
Findings of Court:
The appeal by the insurance company was dismissed, affirming the State Commission's decision in favor of the complainant.
Issues: The main issues were whether the insured suppressed material facts regarding health conditions and whether the insurance company's repudiation was justified.
Ratio Decidendi: The court held that the insurance company failed to prove material non-disclosure as the insured was deemed healthy based on the medical examination conducted before the policy was issued.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. insurance claim repudiation due to policy lapse. (Para 1 , 2 , 3) |
| 2. claim protest and legal notice issued. (Para 4 , 5) |
| 3. state commission's analysis of evidence. (Para 6 , 7) |
| 4. evaluation of medical evidence and burden of proof. (Para 12 , 13 , 14) |
| 5. burden of proof and material non-disclosure. (Para 18 , 19 , 20) |
| 6. assessment of health status at policy issuance. (Para 21 , 22 , 24 , 25) |
| 7. conclusion on the validity of the claim. (Para 26 , 27 , 28) |
| 8. final dismissal of the appeal. (Para 29 , 30) |
ORDER
PER A P SAHI, PRESIDENT
1. The State Commission of Karnataka has allowed CC no. 402 of 2018 filed by the respondent/ complainant holding that the appellant insurance company was deficient in its services by not reimbursing the claim of the complainant. The deceased husband of the complainant late Mr Veeresh aged about 49 years had acquired a Max Life Insurance Policy on 10.12.2014. He fell ill in the month of October 2016 and he died on 26.10.2016 due to aspiration problems as reported. The respondent/ complainant, being the nominee and widow of Mr Veeresh, requested for the reimbursement for the risk covered under the said policy, but the same was repudiated vide letter dated 31.03.2017, on the ground that the policy had lapsed due to non- payment of renewal premium by the due date.
2. The complainant protested against the same that the payments had already been made and therefore, the policy had not lapsed with the grace period available and therefore the claim deserved to be reconsidered. The insurance Company took up the matter and vide letter dated 22.05.2017 intimated the complainant that her claim has been admitted for an evaluation.
3. On 27.06.2017 the final repudiation letter stated an all together different reason of non- disclosure of material facts about the pre-existing diseases of the insured and on that ground the claim was finally repudiated. The letter repudiating the claim dated 27.07.2017 is extracted herein as under:
Dear Mr. Amaramma Veeresh,
Subject Claim Reference Number (201635801022), Policy Number (258122704).
This is with reference to the captioned death claims. The proposal form was received by us at our branch o' ice on 12DEC2014 and policy was issued on 20.JAN 2015.
We refer to the proposal form wherein, late Mr. Veeresh had given a declaration, that he had made complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the proposal form. However, the following questions in the proposal form have been answered as 'NO'
Ques-3) have you ever been investigated, treated or diagnosed with any of the following conditions. If yes, please provide details including doctor's name and dates (or attach relevant questionnaire).
x) Epilepsy, nervous disorder, multiple sclerosis, tremors, numbness, double vision, paralysis, depression or psychiatric disorders.
However, as per medical records received dated 04 MAR 2014, LA was diagnosed with bibrachial amyotrophy and neuralgic amyotrophy (a condition where in there is extreme weakness of upper limbs with thinning, which was increasing 10 percent every month), which is prior to signing proposal form, Therefore, it is evident that medical disclosure as required in the proposal form was not made by late Mr. Veeresh. At the stage of underwriting, had the above stated facts been disclosed to us, the captioned policy would not have been issued In the light of above Information, we are declining the death claim against the above mentioned policy for reasons of material medical non-disclosure by late Mr. Veeresh.
We wish to draw your attention to the following clause of the Policy Terms and Conditions-
10.4 Full Disclosure and incontestability
10.4.1 Insurance is contract of utmost good faith and we rely and trust upon your representations. This policy has been underwritten and issued by us based on the information provided by you in/with the proposal form, In case of any concealment, non disclosure or fraud
