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2025 Supreme(Online)(SCDRC) 7062
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
JUSTICE SUNITA YADAV, PRESIDENT, DR.SRIKANTH PANDEY, MEMBER
HDFC STANDARD LIFE INSURANCE COMPANY LIMITED – Appellant
Versus
SMT. RATNA MISHRA – Respondent
FIRST APPEAL NO. SC/23/A/16/719
For the Appellants/Petitioners: Shri Deepesh Joshi
For the Respondents: Shri Parag Kale
Insurers are entitled to repudiate claims for non-disclosure of material facts by the insured, establishing the principle of utmost good faith in insurance contracts.
Headnote:(A) Consumer Protection Act, 1986 - Sections relevant to insurance contracts - Insurer's duty and obligations - Contract of insurance requires utmost good faith from the insured; failure to disclose material facts renders the contract voidable. (Paras 6, 13, 15)
(B) Insurance - Claim repudiation - Claim was denied due to non-disclosure of pre-existing medical conditions - Insurer not in breach as per legal principles established.
Facts of the case:
The respondent's husband obtained an insurance policy and later died of a heart attack, but had suppressed prior cancer diagnosis when obtaining the policy. The insurance claim was initially repudiated, leading to the complaint.
Findings of Court:
The insurer had correctly repudiated the claim due to material misrepresentation affecting the risk assessment; complaint by the respondent was overturned.
Issues: The principal issue was whether the deceased’s failure to disclose his health condition constituted grounds for claim repudiation.
Ratio Decidendi: The court ruled that suppression of material health information by the insured empowered the insurer to deny the claim; established that insurance contracts delegate substantial weight on full factual disclosure.
Result: Appeal allowed; the lower court's decision was set aside.
| Table of Content |
|---|
| 1. introduction to appeal and initial facts regarding insurance claim. (Para 2 , 3) |
| 2. court observations on evidence and findings during appeal. (Para 4 , 11 , 17) |
| 3. arguments presented by both parties regarding claim repudiation. (Para 5 , 6 , 16) |
| 4. arguments presented by both parties regarding the validity of the claim. (Para 7) |
| 5. discussion on prior medical conditions and contract obligations. (Para 12) |
| 6. discussion on legal obligations under insurance contract and non-disclosure. (Para 13 , 14 , 15) |
Per Say Justice SunitaYadav:
This appeal by the opposite parties/appellants-insurance company is directed against the order dated 13.10.2015 passed by the District Consumer Disputes Redressal Commission, Khandwa (for short the ‘District Commission’) in C. C. No. 239/2014 whereby the complaint filed by the complainant/respondent has been allowed.
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2. In short facts of the case are that the complainant's husband Late Ajay Mishra during his life time had obtained a life insurance policy under CRD scheme in October-2012 from the opposite parties/appellants-insurance company for a sum of Rs.4,40,655/-. Her husband (deceased-insured) died on 19.01.2013 due to heart attack and when the claim was submitted to the insurance company, the same was repudiated by the insurance company on 04.07.2013 on account of the fact that the deceased-insured was suffering from cancer cholangio at the time of submission of proposal form and was found guilty of breach of the contract. The complainant therefore alleging deficiency in service on part of the insurance company approached the District Commission seeking sum insured with bonus, interest, compensation and costs.
3. The opposite party-insurance company resisted the complaint on the ground that the deceased-insured has deliberately suppressed his past medical record pertaining to a serious disease Cancer Cholangio and the complainant had obtained the insurance policy by suppressing the material fact and information. Under these circumstances the claim filed by the complainant was repudiated and while doing so there has been no deficiency in service on part of the insurance company. It was thus prayed that the complaint be dismissed with costs.
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4. The District Commission allowed the complaint directing the opposite parties/appellants-insurance company to pay sum insured under the policy with bonus within 45 days failing which interest @ 12% p.a. will be payable on the amount. Compensation of Rs.10,000/- with costs of Rs.1,000/- is also awarded.
5. Learned counsel for the opposite parties/appellants-insurance company argued that the impugned order is perverse and against the settled principles of law. It is further argued that the learned District Commission completely failed to appreciate the fact that the deceased-insured was suffering from cancer as the complainant never disputed the documents filed on record. The District Commission completely failed to appreciate that it is immaterial that death of the deceased- insured was caused due to heart attack as the disease suppressed was a material suppression. It is further argued that the District Commission also lost sight of the fact that the contract of insurance is a contract of Uberrimae Fides i.e. contract of utmost good faith and any person committed breach of good faith becomes disentitle to receive any policy benefits. He therefore prayed that for setting aside the impugned order. He placed reliance on the decisions of Hon'ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company Limited (2009) 8 SCC 316 and in Life Insurance Corporation of India and Others Vs Asha Goel (Smt.) and Another (2001) 2 SCC 160 in support of his contentions.
6. On the other hand, learned counsel for the complainant/respondent argued that the impugned order passed by the District Commission is based on documents and evidence on record and is in accordance with law, therefore, this appeal deserves to be dismissed.
7. Heard on IA-3, an ap
