Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(SCDRC) 3097

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Sunita Kain – Appellant
Versus
India First Life Insurance Company Ltd. – Respondent
FIRST APPEAL NO.-237/2023

Advocates:
For the Appellants/Petitioners: Saloni Dwary, Neetu Bansal
For the Respondents: Aakash Vashishtha

An insurance company cannot validly repudiate a claim based on non-disclosure of common lifestyle diseases or unverified pre-existing conditions without producing concrete medical evidence linking the illnesses to the death, or if the policy conditions were never communicated to the insured.

Headnote:(A) Insurance Act, 1938 - Section 45 - Life insurance - Repudiation of death claim on grounds of non-disclosure of pre-existing diseases (Diabetes and Chronic Kidney Disease) - Onus of proof is on the insurer to establish that the insured was suffering from a material pre-existing illness that would influence a prudent insurer’s decision - Mere reliance on an investigative report based on hearsay, without producing documented medical records (death summary or past history), is insufficient to establish fraudulent concealment or material non-disclosure. (Paras 13, 21, 23)

(B) Consumer Protection - Deficiency in Service - Failure to establish pre-existing disease with cogent evidence - Effect of non-supply of policy terms and conditions - Insurer cannot rely on exclusion clauses not communicated to the insured - Delay in repudiation of claim beyond regulatory timelines constitutes deficiency in service. (Paras 16, 18, 24)

Facts of the case:
The appellant's husband purchased an insurance policy, but following his death, the respondent insurance company repudiated the claim alleging the deceased had failed to disclose pre-existing illnesses including Type 2 Diabetes and Chronic Kidney Disease. The appellant challenged this before the District Commission, which dismissed the complaint. The appellant contended the investigation was based on flawed hearsay evidence and that policy exclusions were never communicated.

Findings of Court:
The court held that lifestyle diseases like diabetes, when not proven to have a direct nexus to the cause of death, cannot be used as a ground for repudiation. The respondent failed to produce any medical records or evidence to prove the alleged pre-existing conditions.

Issues: Whether the respondent acted with deficiency in service by repudiating the life insurance claim on the ground of non-disclosure of pre-existing diseases and whether the policy terms were duly communicated.

Ratio Decidendi: Insurance companies cannot repudiate claims based on common lifestyle diseases or unproven allegations of non-disclosure without concrete medical evidence or documentation establishing a direct link to the cause of death; furthermore, terms and conditions not provided to the insured cannot be invoked to deny a claim.

Result: Appeal allowed; respondent directed to pay sum assured with interest, compensation for mental agony, and litigation costs.

Table of Content
1. overview of facts and arguments regarding insurance repudiation. (Para 1 , 2 , 3 , 4 , 5)
2. legal precedents on pre-existing diseases and non-disclosure obligations. (Para 6 , 7 , 8 , 10 , 11 , 12 , 13 , 14 , 15)
3. court's findings on evidentiary failures and procedural deficiencies. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25)
4. court order and final directions for compensation. (Para 26 , 27 , 28 , 29 , 30 , 31)

CORAM:

HON’BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)

HON’BLE MS. BIMLA KUMARI, MEMBER (FEMALE)

Present : Ms. Saloni Dwary and Ms. Neetu Bansal, Counsel for the appellant (Enrl. No. D/1880/2019, Mobile: 9582076753, Email: info@aualegal.com)

Mr. Aakash Vashishtha, Counsel for the Respondent appeared through VC

PER :HON’BLE JUSTICE SANGITA DHINGRA SEHGAL, PRESIDENT

JUDGMENT

1. The facts of the case as per the District Commission record are as under:

“The case of the Complainant as revealed from the record is that the husband of the Complainant was purchased a Life Insurance policy from the Opposite Party vide policy no. G0000091 and account no. 21290600023506. Mode of premium was one time and Complainant’s husband was paid the premium a sum of Rs. 56,011.46/-. The commencement date of policy was 20.06.2012 and sum assured was Rs. 20,00,000/-. Unfortunately, husband of the Complainant expired and the Complainant gave the intimation to the Opposite Party. The Complainant was complete all formalities regarding the death claim which was necessary by the Opposite Party. The Complainant which she was supposed to settle the claim in advance but in spite of the fact that all required papers were submitted to the Opposite Party on the very first date and Complainant have been reminding to the Opposite Party over the phone and by personal visit to settle the claim but nothing was done. Death claim was not given by the Opposite Party when the Complainant has spent the entire amount from her pocket and was under acute financial constraint and rejecting the claim thereafter on flimsy grounds under the shelter of terms and conditions of the policy which were never a part of the contract issued to the deponent and were never supplied to the Complainant. The act of the Opposite Party are nothing but fleecing general public under the grab of covering them under the life insurance policies which were created for the benefits of the public at large. The exclusions clauses referred by the Opposite Party are never brought to the knowledge of the general public nor are the beneficiaries made aware of these exclusions which are put in a fine print and are kept only with the insurance companies to defraud the general public of their legitimate claims. Non settlement of the genuine claim amounts to clear deficiency of service on the part of the Opposite Party. Complainant has prayed to direct the Opposite Party to pay Rs. 20,00,000/- i.e. settlement of the claim.

2. The Opposite Party contested the case and filed its written statement. It is the case of the Opposite Party is that Mr. Brahm Singh Kain had approached Opposite Party Company for issuance of insurance policy under the “India First Group Credit Life Plan” to cover the risk of the loan amount of Rs. 20,00,000/- which was taken by the Deceased Life Assured from the Bank of Baroda. The Deceased Life Assured had duly submitted the signed Member Form for the same on 18.06.2012. On based upon the information provided in the Member form, more specifically in relation to the health declaration of the life assured, the Opposite Party accepted the proposal and granted the policy bearing master policy no. G0000091 on 20.06.2012, wherein the risk commencement date was also 20.06.2012. Under the said policy the Opposite Party company had undertook to cover the risk of the unpaid loan amount on behalf of the Deceased Life Assured (DLA), subjected to the condition that the Life Assured had disclosed all the health related information to the Opposite Party Company and

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2026 Supreme(Online)(SCDRC) 3097

STATE CONSUMER DISPUTES REDRESSAL COMMISSIONSangita Dhingra Sehgal, President, Bimla Kumari, MemberSunita Kain – AppellantVersusIndia First Life Insurance Company Ltd. – RespondentFIRST APPEAL NO.-237/2023

An insurance company cannot validly repudiate a claim based on non-disclosure of common lifestyle diseases or unverified pre-existing conditions without producing concrete medical evidence linking the illnesses to the death, or if the policy conditions were never communicated to the insured.

Cases Referred (1)

STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Bimla Kumari, Member
Sunita Kain – Appellant
Versus
India First Life Insurance Company Ltd. – Respondent
FIRST APPEAL NO.-237/2023