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2026 Supreme(Online)(SCDRC) 2266
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
A.K. Agarwal, Member, R. N. Sarswat, Member
HDFC Life Insurance Company Limited – Appellant
Versus
Kishanlal – Respondent
FIRST APPEAL NO: 15/2021
For the Appellants/Petitioners: Shweta Jain
For the Respondents: Bhimsen Joshi
An insurance contract is governed by the principle of 'uberrima fides' (utmost good faith); suppression of a material fact relating to the insured's health, which would influence a prudent insurer's risk assessment, provides a valid and legal ground for repudiating the insurance claim.
Headnote:(A) Consumer Protection - Insurance - Non-disclosure of material facts - Repudiation of claim - Proposer is duty-bound to disclose all material facts affecting risk assessment.
(B) Evidence - Hospital records vs. Affidavits - Medical records prepared during the course of treatment carry significant evidentiary value compared to generic affidavits of neighbors.
(C)
Facts of the case:
The respondent challenged the repudiation of an insurance claim by the appellant, alleging that the life assured concealed a pre-existing HIV/AIDS condition. The lower forum allowed the complaint, but the appeal challenged this on the ground of suppression of material facts.
(D)
Findings of Court:
The Commission found that the life assured deliberately suppressed medical disclosures, violating the principle of uberrima fides, and that the medical evidence clearly established the pre-existing condition. (E)
Issues: Whether the life assured suppressed material facts regarding health and whether the repudiation was justified. (F)
Ratio Decidendi: Suppression of a material fact relating to health, which would influence a prudent insurer in accepting the risk, entitles the insurer to repudiate the claim, and hospital treatment records constitute superior evidence of such ailment. (G)
Result: Appeal allowed; complaint dismissed.
| Table of Content |
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| 1. overview of the insurance claim and initial dispute. (Para 1 , 2 , 3) |
*Judgment*
Authored by: Hon’ble Mr. R. N. Sarswat – Member
The present appeal has been preferred by HDFC Life Insurance Company Limited (hereinafter referred to as the Appellant/ Opposite Party No. 2) against the order dated 18.08.2020 passed by the learned District Consumer Disputes Redressal Commission, Rajsamand (hereinafter referred to as the DCDRC) in Consumer Complaint No. CC/49/2019, whereby the learned DCDRC allowed the complaint filed by the Respondent No. 1/ Complainant and directed the appellant insurance company to honor the death claim arising out of the policy issued in favor of the insured.
Complainant’s Version
Mr. Kishan Lal (hereinafter referred to as the Complainant) submitted that his brother, Mr. Ratan Lal (hereinafter referred to as the Life Assured), had purchased a tractor, which was financed by Cholamandalam Finance and Investment Co. Ltd. (hereinafter referred to as the Proforma Respondent/ Opposite Party No. 1). In connection with the said loan facility, the Life Assured obtained a Single Life Premium Insurance Policy from the appellant insurance company.
The policy certificate bearing No. XVFPRSDO0002287026 was issued under Master Policy No. PP000151, providing a risk coverage of Rs. 794,492/- to the Life Assured. The policy was valid for the period of 22.02.2018 to 21.02.2022, for which a single premium of Rs. 15,000/- was paid. The Complainant was declared as the nominee under the said policy.
It was further averred that the Life Assured was regularly paying the installments of the loan. However, on 11.11.2018, he developed complaints of a cold and shortness of breath and was admitted to Maharana Bhupal Hospital, Udaipur, where he expired on 12.11.2018 during the course of treatment.
Thereafter, the Complainant submitted a claim for the insured amount of Rs. 794,492/- to the Appellant through the Proforma Respondent. However, the appellant insurance company repudiated the claim.
The Complainant alleged that the repudiation of the claim was arbitrary and illegal. It was further contended that the policy had been issued after due examination and that the insured had not concealed any material fact at the time of obtaining the policy.
Proceedings before the DCDRC
Aggrieved by the repudiation of the insurance claim, the Complainant filed Consumer Complaint No. CC/49/2019 before the DCDRC, on 23.04.2019, seeking the following reliefs:
(i) Payment of Rs. 794,492/- towards the sum assured;
(ii) Compensation of Rs. 1,00,000/- for mental, physical, and economic damages.
In support of his case, the Complainant filed his evidence affidavit, along with relevant documents, including copies of the Death Certificate, Repudiation Letter dated 16.03.2019, Certificate of Insurance, and Loan Account Statement.
In response, the Opposite Party No. 2, HDFC Life Insurance Co. Ltd., filed its detailed written statement, contesting the complaint. It was contended that the Life Assured had furnished false and incorrect information in the proposal form. It was further alleged that during the course of the investigation, it was revealed that the Life Assured had been suffering from HIV/AIDS for a considerable period before obtaining the policy, which ultimately led to his demise. According to the insurer, the said ailment was not disclosed at the time of obtaining the insurance policy.
The appellant contended that such non-disclosure amounted to suppression of material facts, constituting misrepresentation and a violation of the doctrine of uberrima fides (utmost good faith) governing contracts of insurance, thereby justifying repudiation of the claim.
In support of its defense, Mr. Kunal Arora, Deputy Manager (Legal), HDFC Life Insurance Co. Ltd., filed his evidence affidavit, along with several documents, including copies of the Proposal Form, Certificate of Insurance, PAN Card of the deceased, Aadhaar Card of the Complainant, Cancelled
