Insurers must conduct KYC due diligence at policy inception; cannot withhold claims based on post-death investigations alleging fraud without proving suppression, as death certificate prevails and delay constitutes deficiency.

JUDGMENT

(Delivered on 01.04.2026)

Per Milind S.Sonawane, Hon’ble Presiding Member.

This is an appeal challenging the correctness and legality of the judgment and order passed by the learned District Consumer Disputes Redressal Commission, Aurangabad (the ‘District Commission’ for short) in C.C.No.161/2013, whereby the District Commission dismissed the complaint filed by the appellant by majority (President and one Member). The another Member of the Coram namely Kiran R. Thole however, wrote the dissenting judgment allowing the complaint.

2. The brief facts giving rise to this appeal are that, the complainant is a son of deceased Vijay Govind Lade, who had taken Life Insurance Policy from the respondents on 28.03.2012. Sum of Rs.24 Lakh was payable on the accidental death and Rs.16 Lakhs payable on the natural death of the insured. On 08.10.2012 means, merely 6 months of the policy, the insured Vijay Lade died of the heart attack. The appellant along with all the necessary documents preferred the insurance claim to the respondents. However, the respondents kept his insurance claim in abeyance for the reason that, during the early death inquiry it was allegedly found to them that, the insured has obtained the policy by fraud and the police investigation is pending.

3. Being aggrieved by that approach of the respondents the appellant firstly filed his consumer Complaint before the District Commission on 18.06.2013. That case proceeded ‘ex-parte’ against the respondents and the decision was given in the favour of the appellant on 26.02.2014 by allowing the complaint. Thereafter, the respondents preferred an appeal against that decision to this Commission. The First Appeal number of the same was 205/2014. This Commission after hearing both parties dismissed the appeal filed by the respondents and upheld the ex- parte judgment given by the District Commission. The respondents challenged that judgment before the Hon’ble National Commission by preferring Revision Petition No.3268/2015 . In that case Hon’ble National Commission on 08.07.2016 set-aside the ex-parte order passed against the respondents and directed the District Commission to give an opportunity to lead the evidence to them. After that, the case was heard by the District Commission afresh, in which the above impugned judgment has been passed.

4. The respondents appeared before the District Commission and contested the matter. It is contended by them that, the insured had obtained the insurance policy by fraud and deception. After the appellant has filed the claim form they initiated inquiry into it, as the death of the insured occurred within the 2 years of the inception of the policy. The inquiry report of S.A. Associates disclosed that, there was no person in existence named as Vijay Govind Lade at the time of taking the insurance policy. The address which was given by the insured was MAHADA colony, Aurangabad. On that address Govind Lade (father of the insured) and Rohini Lade were residing. They were not having any child. When the inquiry Officer visited that premises one Dyaneshwar Dasare was residing there since last 2 to 3 years. It is also claimed to have revealed to the investigator that, as per the record of the Municipal Corporation there was no cremation of any one bearing the name Vijay Lade on 08.10.2012. The policy in question has been falsely prepared by