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2025 Supreme(Online)(NCDRC) 3655
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
AVM J. RAJENDRA, AVSM VSM (Retd.), MEMBER, HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER
Max Life Insurance Co. Ltd. – Appellant
Versus
Smt. Shalini Devendra Shasrakar – Respondent
First Appeal No. 1653 of 2016 | Complaint no. 55 of 2013
For the Appellants/Petitioners:Ms. Suman Bagga, Advocate
For the Respondents: Mr. Gaurav Barathi, Amicus Curiae
The insurer must prove non-disclosure of material facts in life insurance claims; failure to do so results in claim validity.
Headnote:(A) Consumer Protection Act, 1986 - Section 19 - Claim repudiation by insurer - The insurer denied coverage citing suppression of pre-existing medical conditions, asserting the insured was diagnosed with Congestive Cardiac Failure prior to policy commencement. The State Commission ruled that the insurer failed to prove such conditions existed at the relevant time, thus the repudiation was illegal. (Paras 3, 11, 12, 15)
(B) Burden of proof - In insurance claims, the burden lies on the insurer to establish non-disclosure of material facts. The insurer failed to provide adequate evidence to support its claim of policy violation. (Paras 10, 41, 52)
(C) Utmost good faith - The principle of 'uberrima fides' requires transparency from the insured; however, any ambiguity in the proposal form is construed contra proferentem against the insurer. (Paras 15, 47)
Facts of the case:
The deceased insured had a life policy of Rs.25,00,000 and died shortly after obtaining it. Claim was denied citing a pre-existing heart condition, which the claimant disputed.
Findings of Court:
The insurer could not substantiate their claim of non-disclosure and failed to prove a pre-existing condition.
Issues: Whether the complainant suppressed any material medical condition while applying for the insurance.
Ratio Decidendi: The insurer's failure to prove the existence of pre-existing conditions and the principle of utmost good faith underpinned the court's decision favoring the complainant.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. jurisdiction established under the consumer protection act. (Para 1) |
| 2. facts regarding the deceased's insurance claim and subsequent repudiation. (Para 3 , 4) |
| 3. order of the state commission concerning the claim. (Para 5 , 10) |
| 4. arguments presented by both parties regarding the claim. (Para 6 , 7 , 8) |
| 5. court's examination and assessment of the sufficiency of evidence. (Para 9 , 11 , 12) |
| 6. burden of proof principles and the contra proferentem rule. (Para 13 , 14 , 15) |
| 7. the court's conclusion on the merits of the case and the decision to uphold the state commission's order. (Para 16) |
| 8. final order dismissing the appeal. (Para 17) |
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
