Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(SCDRC) 2103

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Padma Pandey, Presiding Member, Rajesh K. Arya, Member
HDFC Life Insurance Company Limited – Appellant
Versus
Kamaljit Kaur – Respondent
Appeal No. 124 of 2025 | Consumer Complaint No. 225 of 2021

Advocates:
For the Appellants/Petitioners: Nitin Thatai, Monika Thatai
For the Respondents: Abhishek Kaushik

Insurance contracts are governed by the principle of 'uberrimae fidei', requiring the insured to fully and truthfully disclose all material health facts. Suppression of chronic or serious pre-existing illnesses in the proposal form entitles the insurer to repudiate the claim, regardless of the direct cause of death.

Headnote:(A) Insurance Act, 1938 - Section 45 - Contract of insurance - Principles of 'uberrimae fidei' (utmost good faith) - Disclosure of material facts - An insurance contract is a special contract based on the principle of full disclosure, placing an affirmative duty upon the proposer to make a true and complete disclosure of all material facts that would influence an insurer's decision to accept the risk - Suppression of pre-existing health conditions in a proposal form, whether fraudulent or otherwise, renders the insurance contract voidable at the option of the insurer, irrespective of whether the suppressed fact has a direct nexus to the cause of death. (Paras 35-37).

(B) Evidence Act - Section 65 - Admissibility and probative value of documentary evidence - Secondary evidence - Mere admission of a document into evidence does not dispense with the necessity of proving its contents in accordance with law - Testimony of a treating doctor coupled with contemporaneous medical records regarding a history of chronic ailments serves as substantial, unimpeached evidence of pre-existing disease. (Paras 21, 24).

Facts of the case:
An insurance claim was repudiated by the insurer on the grounds of suppression of material information regarding pre-existing medical conditions, including chronic liver disease and substance dependency, by the life assured at the time of proposing the policy. The District Commission initially allowed the complaint, holding the repudiation unjustified due to alleged evidentiary defects. The insurer appealed, arguing that the suppression of history of chronic, progressive ailments at the proposal stage vitiated the contract of insurance under the doctrine of utmost good faith.

Findings of Court:
The court held that the evidence on record, including hospitalization records and the testimony of the treating physician, established that the deceased had a long-standing history of serious ailments which were deliberately concealed. The court emphasized that in non-medical insurance schemes, the insurer relies exclusively on the insured's declarations, and non-disclosure of systemic, life-threatening conditions strikes at the root of the contract.

Issues: Whether the repudiation of the insurance claim was legally justified based on the alleged suppression of material facts concerning the health of the insured and whether the documentary evidence provided by the insurer was sufficient to prove such suppression.

Ratio Decidendi: The principle of 'uberrimae fidei' requires the insured to disclose all material facts affecting the risk; the failure to do so, particularly concerning significant and progressive health issues, renders the contract voidable. The materiality of a fact is determined by whether its disclosure would have influenced a prudent insurer's decision to undertake the risk, rather than the eventual cause of death.

Result: Appeal allowed. Impugned order set aside and consumer complaint dismissed.

PER RAJESH K. ARYA, MEMBER

The instant appeal has been filed by the opposite party– HDFC Life Insurance Company Limited (appellant herein) seeking setting aside of order dated 30.09.2024 passed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (hereinafter to be referred as ‘District Commission’) vide which, Consumer Complaint bearing No.225 of 2021 filed by the complainant – Kamaljit Kaur (respondent herein) has been allowed against the opposite party by granting following relief:-

“14. In view of the above discussion, the present consumer complaint succeeds and the same is accordingly allowed. OP is directed as under:-

(i) to pay ₹31,00,000/- to the complainant alongwith interest @ 9% per annum (simple) from the date of institution of the present consumer complaint till onwards

(ii) to pay ₹25,000/- to the complainant as compensation for causing mental agony and harassment;

(iii) to pay ₹10,000/- to the complainant/s as costs of litigation.

15. This order be complied with by the OP within a period of 45 days from the date of receipt of certified copy thereof, failing which the amount(s) mentioned at Sr.No.(i) & (ii) above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(i)], till realisation, over and above payment of ligation expenses.

In brief, the case of the complainant before the District Commission was that her husband had obtained an HDFC Life Group Credit Protect Plus Insurance Plan bearing Master Policy No.PP000069 on 06.03.2019 after paying a premium of ₹51,431/-, in which the complainant - Kamaljit Kaur was nominated as beneficiary with a sum assured of ₹31 lakhs. On 18.03.2019, the life assured was admitted to Healing Hospital, Sector-33, Chandigarh with complaints of high grade fever and difficulty in breathing and despite treatment, he unfortunately expired on 23.03.2019, the cause of death being reported as cardiac arrest. Being the nominee, the complainant lodged a claim with the opposite party, which was repudiated vide letter dated 31.01.2020 on the allegation of suppression of pre-existing diseases such as Alcoholic Liver Disease, Diabetes Mellitus Type-II, Hypoglycaemic Brain Injury, Opioid Addiction and Metabolic Toxic Encephalopathy. It was the specific case of the complainant that her husband was not suffering from any such ailments prior to 18.03.2019 and that the repudiation, based merely on the admission notes and without any evidence of prior illness or heart-related disease, was arbitrary, erroneous and unsustainable.

On the other hand, the opposite party, in its reply before the District Commission, pleaded that the Deceased Life Assured (DLA), namely Mr. Baljit Singh, was admitted to Healing Hospital due to uneasiness and subsequently expired on 23.03.2019 due to cardiac arrest. The complainant applied for the death claim on 20.09.2019, where after the opposite party appointed KLCR Investigations Pvt. Ltd. to verify the past medical history of the DLA. As per the investigation report dated 26.11.2019 and the medical records of Healing Hospital, Chandigarh, it was found that the DLA was suffering from Alcoholic Liver Disease, Diabetes Mellitus Type II, Hypoglycemic Brain Injury, Opioid Addiction and Metabolic Toxic Encephalopathy since 2016 i.e. prior to the inception of the insurance policy and was undergoing treatment for the same. It was further pleaded that despite specific questions put to the DLA in the enrolment form, particularly under Clause 22, all answers were falsely given in the negative, thereby concealing material facts, which was evident from the discharge summary dated 13.10.2016 and the death report issued by the treating doctor. It was further pleaded that on account of such alleged suppression and false declarations, the opposite party rejected the death claim vide letter dated 31.01.2020.

The complainants led evidence in support of their cas

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2026 Supreme(Online)(SCDRC) 2103

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONPadma Pandey, Presiding Member, Rajesh K. Arya, MemberHDFC Life Insurance Company Limited – AppellantVersusKamaljit Kaur – RespondentAppeal No. 124 of 2025 | Consumer Complaint No. 225 of 2021

Cases Referred (5)

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Padma Pandey, Presiding Member, Rajesh K. Arya, Member
HDFC Life Insurance Company Limited – Appellant
Versus
Kamaljit Kaur – Respondent
Appeal No. 124 of 2025 | Consumer Complaint No. 225 of 2021