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2025 Supreme(Online)(NCDRC) 3076
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
AVM J. RAJENDRA, J
Max Life Insurance Co. Ltd. – Appellant
Versus
Smt. Shalini Devendra Shasrakar – Respondent
First Appeal No. 1653 of 2016 | CC No. 55 of 2013
For the Appellants/Petitioners: Ms. Suman Bagga
For the Respondents: Mr. Gaurav Barathi, Amicus Curiae
The insurer bears the burden of proving material non-disclosure; ambiguities in disclosure are interpreted contra proferentem; utmost good faith governs insurance contracts; consumer forums’ findings should be upheld if not perverse; absence of corroborative evidence weakens repudiation.
Headnote:(A) Laws and sections relevant - Section 19 of the Consumer Protection Act, 1986; Evidence Act, 1872 - Sections 101, 102, 103, 104, 105, 106; Principles - uberrima fides (utmost good faith); contra proferentem rule; burden of proof in insurance contracts. Key quotes: "duty of disclosure in insurance contracts is based on the principle of uberrima fides (utmost good faith)."; "interpretation contra proferentem, i.e., against the insurer."; "the burden of proving a fact lies on the person who wishes the Court to believe in its existence"; "the burden of proof lies on the insurer to prove the allegation of non-disclosure of a material fact and that the non-disclosure was fraudulent." (ratio and discussion in later paras).
(B) Legal principles - when a complainant alleges no pre-existing condition, the onus to prove non-disclosure rests with the insurer; ambiguities in disclosures are construed against the drafter; standard form contracts require strict reading and the insurer bears the risk of ambiguity.
(C) Important facts of the case - The policy period was from 01/12/2012 to 01/12/2032 for life coverage of Rs.25,00,000; the life assured died on 29/04/2013; claim repudiated on 30/09/2013 on the ground of alleged pre-existing heart disease having been admitted to Gurukrupa Nursing Home on 05/11/2012; investigations revealed cardiac conditions prior to policy; claim filed before State Commission seeking payment of the sum assured with interest and compensation; State Commission partly allowed the complaint.
(D) Main issues addressed by the court - Whether there was suppression of pre-existing disease prior to policy; whether non-disclosure was proven; whether repudiation was justified; whether evidence and investigation reports were admissible and credible. (E) Findings and reasoning (ratio decidendi) - The insurer did not establish that the life assured was suffering from pre-existing conditions or that he was aware of such conditions prior to answering the proposal; non-disclosure was not proven on the record; burden of proof lies with the insurer; unauthenticated and unsupported documents cannot prove suppression; contra proferentem applies to unclear queries in the proposal; Uberrima fides governs disclosures in insurance contracts. (F) Final decision or result - "First Appeal No.1653 of 2016 is, therefore, dismissed."; no order as to costs. (G) Parties - (1) Opposite Party/Insurer (insurance company); (2) Complainant/Respondent (life insured’s spouse). (H) Dissent or alternative viewpoints - None expressed in the text.
| Table of Content |
|---|
| 1. procedural posture: initiation of appeal, delay condonation, and references to the proceedings and governance. (Para 1 , 2 , 6 , 9) |
| 2. investigation into pre-existing conditions and repudiation; reliance on medical records; suppression of material facts. (Para 3 , 4 , 10) |
| 3. final orders and dismissal/revival of appeal; court’s ultimate conclusion. (Para 5 , 16 , 17) |
| 4. parties' contentions and arguments presented to support respective positions. (Para 7 , 8) |
| 5. burden of proof in non-disclosure lies on insurer; contra proferentem when ambiguity. (Para 11 , 12 , 13 , 14 , 15) |
JUDGMENT
AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER
1. This Appeal is filed by the OP under Section 19 of the Consumer Protection Act, 1986 (“the Act”), against the Order dated 18.08.2016 passed by the State Consumer Disputes Redressal Commission, Maharashtra at Nagpur (“State Commission”) in CC No. 55 of 2013, wherein the State Commission partly allowed the complaint filed by the Complainant/Respondent.
2. As per the Registry report, there is 64 days delay in filing this Appeal and in the interest of justice, the delay is condoned.
3. Brief facts of the case, as per the complainant, are that the deceased Devendra Wamanrao Shastrakar was the husband of the complainant, hereinafter referred to as Deceased Life Assured (DLA). He had paid the premium of Rs.13370.84 to the Opposite Party (OP) Insurer and obtained an insurance policy covering the risk of his life for sum assured of Rs.25,00,000. The period of policy was from 01/12/2012 to 01/12/2032. The said policy was issued after due medical examination of the complainant and conducting Pathological Tests of his blood and Urine. The DLA suffered swelling on his leg on 15/03/2013 and was taken to the hospital of Dr. Kolte. He was diagnosed with Jaundice and was admitted to hospital on 15/03/2013 and after treatment he was discharged on 21/03/2013 as he got relief. He died on 29/4/2013. The complainant gave the intimation of death of the DLA to OP and submitted claim along with necessary documents to the OP for the sum assured under the policy. The OP repudiated her claim vide letter dated 30/09/2013 on the ground that the DLA was admitted in Gurukrupa Nursing Home on 05/11/2012 due to suffering from Heart Disease. However, he was not suffering from any such heart disease on 05/11/2012 and therefore the repudiation of the claim is illegal. The complainant filed a complaint before State Commission seeking directions to OP to pay Rs.25,00,000 along with interest @ 12% per annum from 29/6/2013 till realization, pay compensation of Rs. 2,00,000 for harassment and Rs. 25,000 as costs.
4. On issue of notice, OP resisted the complaint by filing its written version. It was admitted that it issued policy to the DLA to cover risk of his life, and the period of that policy was from 01/12/2012 to 01/12/2032 and that DLA died on 29/04/2013. OP admitted that it received claim papers from her claiming the sum assured of Rs.25,00,000. It is the case of OP that on receiving claim papers from complainant, it conducted an investigation through M/s Transoft Solutions, who submitted first report on 08/08/2013 and second report on 21/08/2013. Thereafter, it reinvestigated the matter through Charter House and it was revealed that DLA was suffering from Congestive Cardiac Failure (CCF) with Coronary Artery Disease and that his CPK and MB levels were raised to 41 prior to signing the proposal by him for policy. He was an indoor patient of Gurukrupa Nursing Home on 05/11/2012 for the aforesaid disease and he was discharged on 09/11/2012. He was having low blood pressure and he was having history of Pedal Swelling and diagnosed to have CCF and DCMP (Dilated Cardio Myopathy). As per medical certificate obtained from Dr. Akhfaq Shaikh, the DLA was known to him for 10 years and he was suffering from Hypertension (HT) since last one and half years. The DLA suppressed said Pre Existing Disease before submitting proposal from for o
